Question

On July 1, K. Resser opened Resser’s Business Services. Resser’s accountant listed the following chart of accounts:
Cash
Supplies
Prepaid Insurance
Equipment
Furniture and Fixtures
Accounts Payable
K. Resser, Capital
K. Resser, Drawing
Business Services Revenue
Wages Expense
Rent Expense
Utilities Expense
Miscellaneous Expense

The following transactions were completed during July:
a. Resser deposited $ 25,000 in a bank account in the name of the business.
b. Bought tables and chairs (Furniture and Fixtures) for cash, $ 725, Ck. No. 1200.
c. Paid the rent for the current month, $ 1,750, Ck. No. 1201.
d. Bought computers and copy machines (Equipment) from Ferber Equipment, $ 15,700, paying $ 4,000 in cash and placing the balance on account, Ck. No. 1202.
e. Bought supplies on account from Wiggins’s Distributors, $ 535.
f. Sold services for cash, $ 1,742.
g. Bought insurance for one year, $ 1,375, Ck. No. 1203.
h. Paid on account to Ferber Equipment, $ 700, Ck. No. 1204.
i. Received and paid the electric bill, $ 438, Ck. No. 1205.
j. Paid on account to Wiggins’s Distributors, $ 315, Ck. No. 1206.
k. Sold services to customers for cash for the second half of the month, $ 820.
l. Received and paid the bill for the business license, $ 75, Ck. No. 1207 (Miscellaneous Expense).
m. Paid wages to an employee, $ 1,200, Ck. No. 1208.
n. Resser withdrew cash for personal use, $ 700, Ck. No. 1209.

Required
1. Record the owner’s name in the Capital and Drawing T accounts.
2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts.
3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction.
4. Foot the T accounts and show the balances.
5. Prepare a trial balance as of July 31, 20—.
6. Prepare an income statement for July 31, 20—.
7. Prepare a statement of owner’s equity for July 31, 20—.
8. Prepare a balance sheet as of July 31, 20—.



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  • CreatedOctober 21, 2014
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