There were following activities occurred during the first month of Babara Schmidts new hair cutting business called
Question:
There were following activities occurred during the first month of Babara Schmidt’s new hair cutting business called The Cutlery:
On August17, Schmidt put $3,000 cash into a chequing account in the name of The Cutlery. She also invested $15,000 of equipment that she already owned.
On August18, Schmidt paid $600 cash for six months of insurance effective immediately.
On August19, she paid $600 cash for furniture for the shop.
On August20, she paid $900 cash to rent space in a strip mall for August.
On August21, she furnished the shop by installing the old equipment and some new equipment that she bought on credit for $1,200. This amount is to be repaid in three equal payments at the end of August, September, and October.
On August22, Cash receipts from haircutting services provided in the first week and a half of business (ended August15) were $225.
On August23, Schmidt provided haircutting services on account for $100.
On August24, Schmidt received a $100 cheque in the mail for services previously rendered on account.
On August25, Schmidt paid $125 to an assistant for working during the grand opening.
On August26, Schmidt interviewed a job applicant. The applicant was successful in getting the position and will receive $750 per week for part-time work starting in September.
On August27, a regular customer paid $500 for services to be provided over the next three month.
Cash receipts from haircutting rendered during the 2nd half of August were $530.
On August28, Schmidt paid an instalment on the accounts payable
On August29, the August hydro bill for $75 was received. It will be paid on September14.
On August30, she withdrew $200 cash for her personal use.
Required:
· Prepare necessary journal entries for the above activities that occurred during August.
· Prepare T-Accounts for all the accounts.
Prepare trial balance, balance sheet and income statement
