Johnson Management Services opens for business and completes these transactions in September.
Sept. 1 John Johnson, the owner, invests $38,000 cash along with office equipment valued at $15,000
in the business.
2 Prepaid $9,000 cash for 12 months’ rent for office space. (Hint: Debit Prepaid Rent (an asset)
for $9,000.)
4 Made credit purchases for $8,000 in office equipment and $2,400 in office supplies.
8 Completed work for a client and immediately received $3,280 cash.
12 Completed a $15,400 project for a client, who must pay within 30 days.
13 Paid $10,400 cash to settle the payable created on September 4.
19 Paid $1,900 cash for the premium on an 18-month insurance policy. (Hint: Debit Prepaid
Insurance (an asset) for $1,900.)
22 Received $7,700 cash as partial payment for the work completed on September 12.
24 Completed work for another client for $2,100 on credit.
28 John Johnson withdrew $5,300 cash for personal use.
29 Purchased $550 of additional office supplies on credit.
30 Paid $860 cash for this month’s utility bill.
Required
1. Open the following T-accounts—Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Prepaid Rent; Office Equipment; Accounts Payable; J. Johnson, Capital; J. Johnson, Withdrawals; Service Fees Earned; and Utilities Expense. Post the transactions in the T-accounts.
2. Prepare a trial balance as of the end of September.
3. Prepare an income statement for the month of September.
4. Prepare a statement of owner’s equity for the month of September.
5. Prepare a balance sheet as of September 30.
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