Refer to the transactions for Atkins Advertising Agency in Problem 3-11. Required 1. Record each transaction directly
Question:
Refer to the transactions for Atkins Advertising Agency in Problem 3-11.
Required
1. Record each transaction directly in T accounts using the letters preceding the transactions to identify them in the accounts. Each account involved in the problem needs a separate T account.
2. Prepare a trial balance at January 31.
Data From Problem 3-11:
Atkins Advertising Agency began business on January 2. The transactions entered into by Atkins during its first month of operations are as follows:
a. Acquired its articles of incorporation from the state and issued 100,000 shares of capital stock in exchange for $200,000 in cash.
b. Purchased an office building for $150,000 in cash. The building is valued at $110,000, and the remainder of the value is assigned to the land.
c. Signed a three-year promissory note at the bank for $125,000.
d. Purchased office equipment at a cost of $50,000, paying $10,000 down and agreeing to pay the remainder in ten days.
e. Paid wages and salaries of $13,000 for the first half of the month. Office employees are paid twice a month.
f. Paid the balance due on the office equipment.
g. Sold $24,000 of advertising during the first month. Customers have until the 15th of the following month to pay their bills.
h. Paid wages and salaries of $15,000 for the second half of the month.
i. Recorded $3,500 in commissions earned by the salespeople during the month. They will be paid on the fifth of the following month.
Step by Step Answer:
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1337491471
10th edition
Authors: Gary A. Porter, Curtis L. Norton