Question

Below are the transactions for Ute Sewing Shop for March, the first month of operations. March 1 Issue common stock in exchange for cash of $3,000. March 3 Purchase sewing equipment by signing a note with the local bank, $2,700. March 5 Pay rent of $600 for March. March 7 Martha, a customer, places an order for alterations to several dresses. Ute estimates that the alterations will cost Martha $800. Martha is not required to pay for the alterations until the work is complete. March 12 Purchase sewing supplies for $130 on account. This material will be used to provide services to customers. March 15 Ute delivers altered dresses to Martha and receives $800. March 19 Ute agrees to alter 10 business suits for Bob, who has lost a significant amount of weight recently. Ute receives $700 from Bob and promises the suits to be completed by March 25. March 25 Ute delivers 10 altered business suits to Bob. March 30 Pay utilities of $95 for the current period. March 31 Pay dividends of $150 to stockholders

Answer 1

Solution: T-accounts: cash Utilities expense Beg bal Mar 30. 95 Dividends Beg bal Mar 31. 150 Beg bal Mar 1. Mar 15. Mar 19. 3000 600 Mar 5. 800 95 Mar 30. 700 150 Mar 31. End bal 95 End bal 150 End bal 3655 Equipment Beg bal Mar 3. Supplies Beg bal Mar 12. 130 Rent expense Beg bal Mar 5.600 2700 End bal 2700 End bal 130 End bal 600 Deferred revenue Beg bal Mar 25. 700 700 Mar 19. Accounts payable Beg bal 130 Mar 12. service revenue Beg bal 800 Mar 15. 700 Mar 25. End bal End bal 130 End bal 1500 Common stock Beg bal 3000 Mar 1. Notes payable Beg bal 2700 Mar 3. End bal 3000 End bal 2700