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3 Problem 1

1. Owners invested $25,000 in cash to start the business and received common stock. 2. The month's rent of $500 was prepaid in cash. 3. Equipment costing $8,000 was purchased on credit.

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1K views

3 Problem 1

1. Owners invested $25,000 in cash to start the business and received common stock. 2. The month's rent of $500 was prepaid in cash. 3. Equipment costing $8,000 was purchased on credit.

Uploaded by

bhavinii
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Problem 1.

5
During the month of June, bon voyage travel recorded the following transactions

Transactions
1. Owners invested $25000 in cash to start the business. They received common stock 2. The Month's rent of $500 was prepaid in cash 3. Equipment costing $8000 was bought on credit 4. $500 was paid for office supplies 5. Advertising costing $750 was paid for with cash 6. Paid $3000 employee salaries in cash 7. Earned travel commissions of $ 10000 of which $ 2000 was received in cash 8. Paid $ 5000 of the $8000 owed to the equipment supplier 9. Used $100 of the office supplies 10. Charged $ 1000 of miscellaneous expenses on the corporate credit card

Owners invested $25000 in cash to start the business. They received common stock
Cash Account s + + Receivab le Supplies Accounts Inventory + Equipmen = Payable + t Owners Equity

1.

+ $25,000

+ Investment $25,000

2. The Month's rent of $500 was prepaid in cash

The Month's rent of $500 was prepaid in cash


Cash Accounts Supplies Accounts + Receivable + Inventory + Equipmen = Payable + t Owners Equity

1.
2.

+ $25,000

+ Investment $25,000
- Rent 500

500 3. Equipment costing $8000 was bought on credit

Equipment costing $8000 was bought on credit


Cash 1. 2. 3. 4. $500 WAS PAID FOR OFFICE SUPPLIES + $25,000 500 + $8,000 + $8,000 Accounts Supplies Accounts + Receivabl + Inventory + Equipmen = Payable + e t Owners Equity + Investment $25,000 - Rent 500

$500 WAS PAID FOR OFFICE SUPPLIES


Cash Accounts Supplies Accounts Owners + Receivabl + Inventory + Equipme = Payable + Equity e nt + Investment $25,000 - Rent 500 + $8,000 + $8,000

1.

+ $25,000 500

2. 3.

4.
5.

500

+ $500

Advertising costing $750 was paid for with cash

Advertising costing $750 was paid for with cash


Cash 1. 2. 3. + 500 $500 5. 750 6 Paid $3000 employee salaries in cash 4. + $25,000 500 + $8,000 + $8,000 Accounts Supplies Accounts + Receivabl + Inventory + Equipmen = Payable + e t Owners Equity + Investment $25,000 - Rent 500

- Advertising 750

Paid $3000 employee salaries in cash


Cash 1. 2. 3. 4. + $25,000 500 + $8,000 + $8,000 Accounts Supplies Accounts Owners + Receivabl + Inventory + Equipmen = Payable + Equity e t + Investment $25,000 - Rent 500

+ 500 $500 - Advertising 5. 750 750 - Salaries 6. 3,000 3,000 7 Earned travel commissions of $ 10000 of which $ 2000 was received in cash

Earned travel commissions of $ 10000 of which $ 2000 was received in cash


Cash 1. 2. + $25,000 500 Accounts Supplies Accounts + Receivabl + Inventory + Equipmen = Payable + e t Owners Equity + Investment $25,000 - Rent 500

3.
4. 5. 6. 7. 8

+ $8,000
+ 500 $500 750 3,000 + + 2,000 $8,000 Paid $ 5000 of the $8000 owed to the equipment supplier

+ $8,000

750 3,000 + 10,000

Advertising Salaries Commission s

Paid $ 5000 of the $8000 owed to the equipment supplier


Cash 1. 2. 3. 4. 5. 6. 7. 8. 9 500 750 3,000 + + 2,000 $8,000 5,000 Used $100 of the office supplies + $500 750 3,000 + 10,000 5,000 Advertising Salaries Commission s + $25,000 500 + $8,000 + $8,000 Accounts Supplies Accounts + Receivabl + Inventory + Equipmen = Payable + e t Owners Equity + Investment $25,000 - Rent 500

Used $100 of the office supplies


Cash 1. 2. 3. + $25,000 500 + $8,000 + $8,000 Accounts Supplies Accounts + Receivabl + Inventory + Equipmen = Payable + e t Owners Equity + Investment $25,000 - Rent 500

4.
5. 6.

7.
8. 9.

500 750 3,000 + 2,000 5,000

+ $500
750 3,000 + 10,000 5,000 100 100 Advertising Salaries

+ $8,000

Commission s

10. Charged $ 1000 of miscellaneous expenses on the corporate credit card

Charged $ 1000 of miscellaneous expenses on the corporate credit card


Cash 1. 2. 3. 4. 5. 500 750 + $500 750 Advertising + $25,000 500 + $8,000 + $8,000 Accounts Supplies + Receivable + Inventory + Equipment = Accounts Payable + Owners Equity + Investment $25,000 500 Rent

6. 7. 8. 9. 10.

3,000
+ 2,000 5,000 + $8,000 100 + 1,000 5,000

3,000 Salaries
+ Commissions 10,000

100 1,000 Expenses

BON VOYAGE TRAVEL BALANCE SHEET AS OF JUNE 30, ----.

BON VOYAGE TRAVEL INCOME STATEMENT JUNE 1-30, ----. Commissions $10,0 00 $500

Liabilities and Owners Equity


Accounts payable Current liabilities Owners equity $ 4,000 4,000 29,65 0 Cash

Assets
$17,2 50 8,000 400 25,65 0 $ 8,000 $33,6 50

Expenses Rent

Accounts receivable Supplies inventory Current assets

Advertising
Salaries Supplies Misc. Expenses Net Income

750
3,000 100 1,000

____ __ Total liabilities and owners $33,6 equity 50

Equipment

5,350
$ 4,650

Total Assets

1. Owners invest $20,000 of equity capital in Acme Consulting. 2. Equipment costing $7,000 is purchased for $5,000 cash and an account payable of $2,000. 3. Supplies inventory costing $1,000 is bought for cash. 4. Salaries of $4,500 are paid in cash.

Exercise to do at home
5. Revenues of $10,000 are earned, of which $5,000 has been recovered in cash. The remaining $5,000 is owed to the company by its customers. 6. Accounts payable of $1,500 are paid in cash. 7. Customers pay $1,000 of the $5,000 they owe the company.

8. Rent Expense of $750 is paid in cash. 9. Utilities of $500 are paid in cash. 10. A $200 travel expense has been incurred but not yet paid. 11. Supplies inventory costing $200 are consumed.

Ex-2 for H.W


Merchandise was sold for $12000 cash that had cost $7000. To increse inventory, Marvin placed an order with star company for mechandise that world cost $7000. Marvin received the mechandise ordered from star and agreed to pay the $7000 in 30days. Merchandise costing $2000 was sold for $3400 on 30 day open account

Merchandise costing $1500 was sold for $2500 in cash Merchandise costing $2000was sold for $3400 on 30day open account Marvin paid employees for the month $4200 in cash. Purchased land for $20000 in cash Marvin purchased a two year insurance policy for 2800 in cash.

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