Question

Please use the following account names for this homework:

Assets:       Cash         Accounts Receivable         Equipment          Vehicles           Supplies

Liabilities:       Accounts Payable          Unearned Revenue     Dividends Payable

Equity:       Common Stock         Additional Paid-in Capital         Service Revenue

                   Telephone Expense     Utility Expense      Wages Expense      Retained Earnings

PLEASE NOTE: YOU ALREADY DID THE FIRST 8 TRANSACTIONS IN THE PREVIOUS HOMEWORK. THIS IS JUST A CONTINUATION OF THE PREVIOUS HOMEWORK ASSIGNMENT.

Part A:

Please analyze the following transactions (Figure out the increases and decreases in assets, liabilities, and equity as I did in class.) and make the journal entries for these transactions:

A brand new company issued 5,000 shares of common stock. The company received $15 per share from the investors, and the par value is $10 per share.

The company purchased equipment for $3,000 and paid cash.

The company purchased office supplies for $1,000 on account. (On account means the company did not pay for the supplies and must pay for them later.)

The company purchased equipment for $13,000. It paid $6,000 in cash and will pay the rest later.

The company provided a service to a customer and received $4,000 in cash immediately.

The company provided a service to another customer and gave the customer an invoice for $11,000.

The company received $3,500 in advance from a customer for a service that it will provide to the customer over the next 7 months.

The company received $2,500 in cash from the customer who owed $11,000 from transaction #6.

The company received the electric bill for $400 and paid it immediately.

The company received the telephone bill for $600 and decided to pay it later.

The company paid its employees $2,000 of wages for the work they did.

The company paid the phone company $100 of the $600 it owed them from transaction #10.

The company declared a cash dividend of $8,000.

Two weeks later, the company paid the $8,000 dividend to the stockholders.

Part B

Create T accounts for the accounts listed above, and post the journal entries created in Part A to these T accounts.

Part C

Determine the balances of all the accounts and prepare a trial balance. The totals of the 2 columns of the trial balance should be equal to each other, otherwise you have made a mistake somewhere. In the trial balance, the order in which you list the accounts does not matter, but accounts with debit (left side) balances should go in the debit (left) column, and accounts with credit (right side) balances should go in the credit (right) column

Part D

Prepare the income statement and the balance sheet.

Answer 1

Part A Journal Entry Particulars Dr ($) Cr ($) A brand new company issued 5,000 shares of common stock. The company received $15 per share from the investors, and the par value is $10 per share. Cash 75000 Common Stock 50000 Additional Paid-in Capital 25000 The company purchased equipment for $3,000 and paid cash. Equipment 3000 Cash 3000 The company purchased office supplies for $1,000 on account. (On account means the company did not pay for the supplies and must pay for them later.) Office Supplies 1000 Accounts Payable 1000 The company purchased equipment for $13,000. It paid $6,000 in cash and will pay the rest later. Equipment 13000 Cash 6000 Accounts Payable 7000 The company provided a service to a customer and received $4,000 in cash immediately. Cash 4000 Service Revenue 4000 The company provided a service to another customer and gave the customer an invoice for $11,000. Accounts Receivable 11000 Service Revenue 11000 The company received $3,500 in advance from a customer for a service that it will provide to the customer over the next 7 months. Cash 3500 Unearned Revenue 3500 The company received $2,500 in cash from the customer who owed $11,000 from transaction #6. Cash 2500 Accounts Receivable 2500 The company received the electric bill for $400 and paid it immediately. Utility Expense 400 Cash 400 The company received the telephone bill for $600 and decided to pay it later. Telephone Expense 600 Accounts Payable 600 The company paid its employees $2,000 of wages for the work they did. Wages Expense 2000 Cash 2000 The company paid the phone company $100 of the $600 it owed them from transaction #10. Accounts Payable 100 Cash 100 The company declared a cash dividend of $8,000. Retained Earning 8000 Dividend Payable 8000 Two weeks later, the company paid the $8,000 dividend to the stockholders. Dividend Payable 8000 Cash 8000 Part B Cash
Particulars	Amount (DR)		Particulars	Amount (CR)
Common Stock	50000		Equipment	3000
Additional Paid-in Capital	25000		Equipment	6000
Service Revenue	4000		Utility Expense	400
Unearned Revenue	3500		Wages Expense	2000
Accounts Receivable	2500		Accounts Payable	100
			Dividend Payable	8000
			Balance C/d	65500
	85000			85000
Common Stock
Particulars	Amount (DR)		Particulars	Amount (CR)
Balance c/d	50000		Cash	50000
	50000			50000
Additional Paid-in Capital
Particulars	Amount (DR)		Particulars	Amount (CR)
Balance c/d	25000		Cash	25000
	25000			25000
Equipment
Particulars	Amount (DR)		Particulars	Amount (CR)
Cash	3000
Cash	6000
Accounts Payable	7000		Balance c/d	16000
	16000			16000
Office Supplies
Particulars	Amount (DR)		Particulars	Amount (CR)
Accounts Payable	1000		Balance c/d	1000
	1000			1000
Accounts Payable
Particulars	Amount (DR)		Particulars	Amount (CR)
Cash	100		Office Supplies	1000
			Equipment	7000
Balance c/d	8500		Telephone Expense	600
	8600			8600
Service Revenue
Particulars	Amount (DR)		Particulars	Amount (CR)
			Cash	4000
Balance c/d	15000		Accounts Receivable	11000
	15000			15000
Unearned Revenue
Particulars	Amount (DR)		Particulars	Amount (CR)
Balance c/d	3500		Cash	3500
	3500			3500
Accounts Receivable
Particulars	Amount (DR)		Particulars	Amount (CR)
Service Revenue	11000		Cash	2500
			Balance c/d	8500
	11000			11000
Utility Expense
Particulars	Amount (DR)		Particulars	Amount (CR)
Cash	400		Balance c/d	400
	400			400
Telephone Expense
Particulars	Amount (DR)		Particulars	Amount (CR)
Accounts Payable	600		Balance c/d	600
	600			600
Wages Expense
Particulars	Amount (DR)		Particulars	Amount (CR)
Cash	2000		Balance c/d	2000
	2000			2000
Retained Earnings
Particulars	Amount (DR)		Particulars	Amount (CR)
Dividend	8000		Balance c/d	8000
	8000			8000
Dividend Payable
Particulars	Amount (DR)		Particulars	Amount (CR)
Cash	8000		Retained Earning	8000
	8000			8000

Part C

Trial Balance
Accounting Heads	Dr ($)	Cr ($)
Common Stock		50000
Additional Paid-in Capital		25000
Retained Earnings	8000
Equipment	16000
Office Supplies	1000
Accounts Receivable	8500
Accounts Payable		8500
Unearned Revenue		3500
Cash	65500
Service Revenue		15000
Utility Expense	400
Telephone Expense	600
Wages Expense	2000
Total	102000	102000

Part D

Income Statement
Revenue
Service Revenue		15000
Total Revenue		15000
Expenses
Utility Expense		400
Telephone Expense		600
Wages Expense		2000
Office Supplies		1000
Total Expenses		4000
Net Income Before Taxes		11000
Income Taxes		0
Net Income		11000

Balance Sheet
Assets
Current Assets
Cash		65500
Accounts Receivable		8500
Total Current Assets		74000
Fixed Assets
Equipment		16000
Total Fixed Assets		16000
Total Assets		90000
Liabilities and Owner's Equity
Liabilities
Current Liabilities
Accounts Payable		8500
Unearned Revenue		3500
Total Current Liabilities		12000
Owner's Equity
Common Stock		50000
Additional Paid-in Capital		25000
Retained Earning		-8000
Net Income		11000
Total Owner's Equity		78000
Total Liabilities & Owner's Equity		90000