Question

The Four Steps in the Accounting Process

You are operating your accounting firm. Your first client had the following transactions in April 20x7:

1. Borrowed $10,000 from the bank.
2. Purchased $2,250 of computer equipment for cash.
3. Paid $750 cash for this month's rent.
4. Purchased $1,500 of office supplies on credit. It is expected that these supplies will last for 3 months.
5. Billed $500 to customers for services rendered during April.
6. Paid cash for the $1,500 balance owed to the vendor from Transaction 4.
7. Collected $450 cash of the amount billed to the customer in Transaction 5
8. Sold one-half of the equipment purchased in Transaction 2 for $1,125 in cash, with no gain or loss recognized on the sale.
9. Paid $1,000 of the principal from the loan in transaction 1, along with $50 in interest.

Required:

Use the four steps in the accounting cycle to analyze business transactions, a) Identifying transactions from source documents, b) Analyzing transactions using the accounting equation, c) Recording the journal entry and d) Posting the entry to the ledger to complete the following:

1. Prepare journal entries for each of the above transactions.
2. Post the journal entries to T-accounts and total the accounts.
3. From the T-accounts, prepare an unadjusted trial balance. List expenses in alphabetical order.

Use the following chart of accounts names and template:

Cash, Capital Stock, Equipment, Accounts Payable, Rent, Supplies, Accounts Receivable, Revenue.

Your assignment must include a title page and reference page. Review the grading rubric to understand how you will be graded on this assignment. Module 2 Part 2 Lecture: Double Entry System and Financial Statements for examples related to your Critical Thinking assignment for this week. Reach out to your instructor if you have questions about the assignment.

1. Sold one-half of the equipment purchased in Transaction 2 for $1,125 in cash, with no gain or loss recognized on the sale.
2. Paid $1,000 of the principal from the loan in transaction 1, along with $50 in interest.

Required:

Use the four steps in the accounting cycle to analyze business transactions, a) Identifying transactions from source documents, b) Analyzing transactions using the accounting equation, c) Recording the journal entry and d) Posting the entry to the ledger to complete the following:

ACTID Poleg D 1 6 Catch Balance font ce

Answer 1

1) Cash 1oooo Bank Loan loooo 2) Equipment 2250 Cash 2250 3) Rent 750 Cash 750 Supplies 1500 ( Accounts Payable 1500 Accanst Receivable 500 Revenue 500 S Accants Payable 1500 Cash 1500 450 Acounts Receivable 450 Cash 1125 Equipment 1125 9. Bank Loan Interest Expense 1000 50 2050

Bimal Date: Page Nc. Equipment 2250 [1125 750 Rent Cash Bank Loan 10000 2250 Equipment AlcReceivable 450 Equipment 1125 1500 Ale Payable 5 Interest Exp. Balance 1000 Bank loan Bank Loan 1010070 Supplies 1500 gooo Balo Accounts Payabile Balo 1500 Accounts Receivable 500 450 1500 1500 Bali Balo 150 Interest Expens Rent 750 50 Balo 150 Balo 1750 Revenue 500 500 Balance