Steve Russell started a snow removal and landscaping business he called Total Care Services. Steve wants to
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Question:
Steve Russell started a snow removal and landscaping business he called Total Care Services. Steve wants to track the revenue from snow removal and lawn maintenance separately. His friend who is an accounting student suggested he use two separate revenue accounts.
Selected transactions for Total Care Services, for the year ended May 31, 2017, are listed below.
1. | Steve transfers his used pickup truck valued at $3,000 into the business. | |
2. | Steve invested $3,100 cash in the business and opened a bank account in the name of Total Care Services. | |
3. | Purchased a used snow plow from a dealer for $1,520 paying half as a down payment and half on account. | |
4. | Plowed the parking lot of a local mall and billed the mall management company $805. | |
5. | Paid for fuel for the truck $150. | |
6. | Plowed three neighbors’ driveways and immediately got paid $20 each. | |
7. | Collected in full the invoice billed to the mall management company. | |
8. | Paid balance owing on the purchase of the snow plow. | |
9. | Purchased a new lawn mower for $780, paying 20% down payment in cash, the remainder is on account. | |
10. | Paid for business cell phone charges of $30. | |
11. | Purchased $390 of lawn maintenance supplies for cash. | |
12. | Billed customers $1,830 for lawn maintenance services completed. | |
13. | Paid balance owing on lawn mower. | |
14. | Collected $750 from customers for services previously billed. | |
15. | Steve withdraws $1,000 cash for personal use. | |
16. | Provides lawn maintenance services totaling $1,410 for several clients – one client whose bill is $135 pays cash, the remainder are on account. |
For each transaction indicate:
(a) | The basic type of account debited and credited (asset, liability, owner’s equity) | |
(b) | The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.) | |
(c) | By how much each account is increased or decreased. |
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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