On 1 January 2024, Tom Lee started a web design firm, Web Solutions (WS). The following are
Question:
On 1 January 2024, Tom Lee started a web design firm, Web Solutions (WS).
The following are the transactions that occur during the first month of operations.
01 Jan. Tom invested $20,000 cash, and a $6,000 computer in the firm.
01 Jan. Tom received $20,000 from his best friend, Dick as a personal loan to him.
01 Jan. Tom invested the $20,000 which he received from Dick as his own investment in
the firm.
01 Jan. The firm hired a web-designer for $4,500 per month.
01 Jan. The firm paid $3,000 cash for January and February rental and another $1,500 for
the rental deposit. The rental deposit is refundable.
05 Jan. The firm purchased $1,000 of supplies on account from a supplier.
17 Jan. The firm billed a customer $7,000 for a job done.
25 Jan. The firm received $1,000 cash from another customer as advance payment for a
job to be performed in February.
31 Jan. The firm received a telephone bill of $200. Arrangement has been made to pay
the bill on 6 February via inter-bank transfer.
31 Jan. The firm paid the web-designer's salary for the month.
31 Jan. An inventory count of supplies showed $300 was still available.
31 Jan. Depreciation of the computer for the month is $500.
Required:
(a) Analyse the above and record all necessary entries (including adjusting entries).
Narration is not required.
(b) Present the trial balance of Web Solutions as of 31 January 2024.
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short