Question

M&T Plumbing Company completed the following transactional data for the first month of operations. May 1: Steven Mattel deposited $68,700 in the business account. In addition, he transferred his vehicle title, worth $13,820, to the business. Steven received capital in return. 1: A Payment was made for the amount of $2,500 to Sky Properties. The concept states "May through July Rent." 4: Purchased business insurance policy for $2,400 for the period May, 2000, through April 30,2001. 5: Steven went to the Plumbing Tools Distributor and purchased S5,600 on account. This invoice for specialize plumbing tools is due in 30 days. 5: Purchase general plumbing supplies for the amount of $450. 6: Purchased on account plumbing tools from PBS Wholesale costing $1,100. The invoice is payable on May 27. 8: Purchase a computer, $900, and a printer, S79. A check was written for the total amount of $979 under the name Best Buy Company. 8: Purchased office supplies for a total of $450. 9: Plumbing repair was performed for Don Smith Company, S2,800 was sign on account. 10: Deposited $1,000 cash from Don Smith Company in the bank. 11: Bought a pick-up truck for $7,500.00 on account. The first payment of $300 is due on June 15. 15: Paid $500 to Adam Prinkle for contract labor. 15: Signed a contract with Xerox Corporation for the amount of $14,280 for plumbing renovations. The starting date of the contract is May 15, 2000 and the ending date is August 30, 2000. Total amount was received at signature. 16: Provided plumbing services for Letty Petrovsky for $390.

Answer 1

Journal entries ( Along With Adjustment entries)
Date	Particulars	Debit $	Credit $
	Bank A/c….Dr	$        68,700
	Vehicle A/c….Dr	$        13,820
	To Owners Capital A/c		$        82,520
	Rent A/c……Dr	$        833.33
	Prepaid Rent A/c….Dr	$    1,666.67
	To Bank A/c		$          2,500
	Insurance Expense A/c…Dr	$              200
	Prepaid Insurance A/c…Dr	$          2,200
	To Bank A/c		$          2,400
	Plumbing Tools…..Dr	$          5,600
	To Accounts Payables A/c		$          5,600
	Plumbing Supplies….Dr	$        450.00
	To Bank A/c		$        450.00
	Plumbing Tools…..Dr	$    1,100.00
	To Accounts Payables A/c		$    1,100.00
05-27-2000	Accounts Payables A/c…….Dr	$    1,100.00
	To Bank A/c		$    1,100.00
	Computer A/c…Dr	$        900.00
	Printer A/c……..Dr	$          79.00
	To Accounts Payables A/c		$        979.00
	Accounts Payables A/c…….Dr	$        979.00
	To Bank A/c		$        979.00
	Inventory (Office Supplies)….Dr	$        450.00
	To Bank A/c		$        450.00
	Accounts Recievables…..Dr	$    2,800.00
	To Plumbing Repairs ( Income) A/c		$    2,800.00
	Pick Up Truck…..Dr	$    7,500.00
	To Accounts Payables A/c		$    7,500.00
	Labour Expenses……Dr	$        500.00
	To Bank A/c		$        500.00
	Bank A/c……… Dr	$ 14,280.00
	To Accounts Recievables A/c		$ 14,280.00
05-31-2000	Accounts Recievables A/c……………Dr	$    2,856.00
	To Plumbing Repairs ( Income) A/c		$    2,856.00
	( $14280/ 75 Days *15 Days)
	Bank A/c……… Dr	$        390.00
	To Plumbing Repairs ( Income) A/c		$        390.00
	Electric and Water Expenses….Dr	$        250.00
	To Accounts Payables A/c		$        250.00
	Bank A/c……… Dr	$ 26,000.00
	To Loan A/c		$ 26,000.00
	Accounts Payables A/c…….Dr	$    2,000.00
	To Bank A/c		$    2,000.00
	Advertising Expenes…..Dr	$        200.00
	To Accounts Payables A/c		$        200.00
	Accounts Payables A/c…….Dr	$        200.00
	To Bank A/c		$        200.00
	Office Building A/c…..Dr	$ 28,000.00
	To Accounts Payables A/c		$ 28,000.00
	Drawings A/c……Dr	$    2,000.00
	To Bank A/c		$    2,000.00
	Depreciation Expense…..Dr	$        100.00
	To Depreciation on Plumbing Tools		$        100.00
	Depreciation Expense…..Dr	$          15.00
	To Depreciation on Computer		$          15.00
	Depreciation Expense…..Dr	$          51.00
	To Depreciation on Pick Up Truck A/c		$          51.00
	Cost of Goods Sold……Dr	$        100.00
	To Inventory A/c		$        100.00
	Interest Expense……Dr'	$     195.00
	To Interest Payable A/c		$ 195.00
	(26,000*9% /12)

	Income Statement
	Particulars
	Income
	Plumbing Repairs Income	$ 6,046.00
Less :	Cost of Goods Sold	$     100.00
	Gross Margin	$ 5,946.00
	Operating Expenses
	Depreciation	$     166.00
	Rent	$     833.33
	Insurance	$     200.00
	Other Expenses	$ 950.00
	Earning before Interest and Taxes	$ 3,796.67
	Interest Expense	$     195.00
	Earning Before Taxes	$ 3,601.67

Particulars
Assets
Cash	$   126,341
Accounts Recievables	$     (8,624)
Inventory	$           350
Other Current Assets	$        3,867
Total Current Assets	$   121,934
Plumbing Tools	$        5,600
Accumulated Depreciation	$           100
Net Plumbing Tools	$        5,500
Computer and Printer	$           979
Accumulated Depreciation	$              15
Net Computer and Printer	$           964
Pick Up Truck	$        7,500
Accumulated Depreciation	$              51
Net Pick Up Truck	$        7,449
Vehicle	$     13,820
Total Assets	$   149,667
Liabilities
Loan	$     26,000
Accounts Payables	$     39,350
Interest Payable	$           195
Owners Capital	$     82,520
Retained Earnings	$        3,602
Drawings	$     (2,000)
Owners Equity and Capital	$     84,122
Total Liabilities	$   149,667