Question

Problem - Transaction Analysis May 1 Received a cheque in the amount of $5,000 from TUV Restaurant Ltd., for a restaurant food cleanliness assessment to be conducted in June. May 1 Paid $5,000 for office rent for the month of May. May 2 Purchased office supplies for $3,000 on account. May 3 Completed a consultation project for McDanny's Restaurant and billed them $27,000 for the work. May 4 Purchased a laptop computer for $3,000 in exchange for a note payable due in 45 days. May 5 Olivier Bondar was a little short on cash, so the manager made an application for a bank loan in the amount of $20,000. It is expected that the bank will make their decision regarding the loan next week. May 6 Received an invoice from the utilities company for electricity in the amount of $300. May 10 Bank approved the loan and deposited $20,000 into Olivier Bondar's bank account. First loan payment is due on June 10. May 11 Paid for several invoices outstanding from April for goods and services received for a total of $8,000. The breakdown of the invoice costs are: telephone expense $500; advertising expense $3,000; office furniture $2,000; office supplies $2,500. May 13 Paid employee salaries owing from May 1 to May 13 in the amount of $3,000. May 14 Completed consulting work for a U.S. client and invoiced $18,000 US (US funds). The Canadian equivalent is $25,000 CAD. May 15 Received $25,000 cash for work done and invoiced in April. May 18 Hired a new employee who will begin work on May 25. Salary will be $2,500 every two weeks. May 21 Placed an order request for new shelving for the office. Catalogue price is $2,500. May 27 Paid employee salaries owing from May 14 to May 27 in the amount of $3,500. May 29 The bookkeeper was going to be away for two weeks, so the June rent of $5,000 was paid. May 31 Reimbursed $50 in cash to an employee for use of his personal vehicle for company business on May 20. May 31 Shelving unit ordered on May 21 was delivered and installed. Total cost was $3,000, including labour. Required: Create a table with the following column headings and opening balances. Below the opening balance, number each row from 1 to 18:

Answer 1

Date	Account Titles	Debit	Credit
		$	$
May 1	Cash	5,000
	Unearned Revenue		5,000
May 1	Rent Expense	5,000
	Cash		5,000
May 2	Office Supplies	3,000
	Accounts Payable		3,000
May 3	Accounts Receivable	27,000
	Consulting Revenue		27,000
May 4	Computer Equipment	3,000
	Notes Payable		3,000
May 5	No journal entry required	0	0
May 6	Utilities Expense	300
	Utilities Payable		300
May 10	Cash	20,000
	Bank Loan Payable		20,000
May 11	Telephone Expense	500
	Advertising Expense	3,000
	Office Furniture	2,000
	Office Supplies	2,500
	Cash		8,000
May 13	Salaries and Wages Expense	3,000
	Cash		3,000
May 14	Accounts Receivable	25,000
	Consulting Revenue		25,000
May 15	Cash	25,000
	Accounts Receivable		25,000
May 18	No journal entry required	0	0
May 21	No journal entry required	0	0
May 27	Salaries and Wages Expense	3,500
	Cash		3,500
May 29	Prepaid Rent	5,000
	Cash		5,000
May 31	Mileage Expense	50
	Cash		50
May 31	Office Furniture	3,000
	Accounts Payable		3,000