Vince Serrano started Serrano Carpet Installers, and during the first month of operations (January 2007) he completed
Question:
Vince Serrano started Serrano Carpet Installers, and during the first month of operations (January 2007) he completed the following selected transactions:
a. Serrano began the business with an investment of \(\$ 40,000\) cash and a van (automobile) valued at \(\$ 20,000\). The business gave Serrano owner's equity in the firm.
b. Paid \(\$ 32,000\) for equipment.
c. Purchased supplies on account, \(\$ 400\).
d. Paid employee's salary, \(\$ 1,300\).
e. Received \(\$ 800\) for a carpet installation job.
f. Received a \(\$ 500\) bill for advertising expense that will be paid in the near future.
g. Paid the account payable created in transaction (c).
h. Installed carpet for a hotel on account, \(\$ 3,300\).
i. Received cash on account, \(\$ 1,100\).
j. Paid the following cash expenses and made a single compound entry:
(1) Rent, \(\$ 1,000\).
(2) Insurance, \(\$ 600\).
k. Withdrew \(\$ 2,600\) for personal use.
Requirements
1. Open the following four-column accounts: Cash; Accounts Receivable; Supplies; Equipment; Automobile; Accounts Payable; Vince Serrano, Capital; Vince Serrano, Withdrawals; Service Revenue; Salary Expense; Rent Expense; Advertising Expense; Insurance Expense.
2. Record the transactions in the journal. Use the letters to identify the transactions.
3. Post to the accounts and keep a running balance for each account.
4. Prepare the trial balance of Serrano Carpet Installers at January 31, 2007.
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