Question

Saved Help Save & Exits Ko Check my wo For each transaction (1) analyze the transaction using the accounting equation, (2) record the transaction in journal entry form, and (3) post the entry using T-accounts to represent ledger accounts. Use the following (partial) chart of accounts-account numbers in parentheses: Cash (101): Accounts Receivable (106); Office Supplies (124); Trucks (153); Equipment (167); Accounts Payable (201); Unearned Landscaping Revenue (236): Common Stock (307); Dividends (319); Landscaping Revenue (403); Wages Expense (601), and Landscaping Expense (696). a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $86,000 in cash along with equipment having a $46,000 value in exchange for common stock b. On May 21, Elegant Lawns purchases office supplies on credit for $600. c. On May 25, Elegant Lawns receives $9.400 cash for performing landscaping services. d. On May 30, Elegant Lawns receives $2,600 cash in advance of providing landscaping services to a customer.

Answer 1

SOLUTION:
(1)Accounting equation =
Assets= Liabilities + Stockholders Equity
(a) May 15 ➡ Cash + Equipment = Liabilities + Common stock
➡ 86,000+46,000= 0+132,000
➡132,000=132,000

(b) May 21 ➡ Cash + Equipment + Inventory (Office supplies) = Common Stock + Accounts payable(Office Supplies)
➡ 86,000+46,000+600 = 132,000+600
➡ 132600 = 132600

(c) May 25 ➡ Cash + Equipment + Inventory (Office supplies) = Common Stock + Accounts payable(Office Supplies) + Net Income (Landscaping Revenue)

➡ (86,000+9,400)+46,000+600=
132,000+600+9,400
➡ 95,400+46,000+600 = 132,000+600+9,400
➡ 142,000 = 142,000

(d) May 30 ➡ Cash + Equipment + Inventory (Office supplies) = Common Stock+ Accounts payable(Office Supplies) + Net Income (Landscaping Revenue) + Unearned Landscaping Revenue

➡ (95,400+2,600)+46,000+600 = 132,000+600+9,400+2600
➡ 98,000+46,000+600 = 132,000+600+9,400+2600
➡ 144,600= 144,600

(2) Journal Entries :

Date Particulars Debit Credit May 15 Cash A/C 86,000 Equipments A/C 46,000 Common stock A/C 132,000 May 21 Office Supplies A/c 600 Accounts Payable A/C 600 May 25 Cash A/C 9,400 Landscaping Revenue A/C 9,400 May 30 Cash A/C 2,600 Unearned Landscaping Revenue A/C 2,600