1. Began operations by acquiring $16,000 of cash from the issue of common stock. 2. Performed services and collected cash of $900. 3. Collected $4,900 of cash in advance for services to be provided over the next 12 months. 4. Provided $12,200 of services on account. 5. Purchased supplies of $470 on account.
1. Began operations by acquiring $16,000 of cash from the issue of common stock. 2. Performed services and collected cash of $900. 3. Collected $4,900 of cash in advance for services to be provided over the next 12 months. 4. Provided $12,200 of services on account. 5. Purchased supplies of $470 on account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following accounting events apply to Mary's Designs for Year 1:
Asset Source Transactions
1. Began operations by acquiring $16,000 of cash from the issue of common stock.
2. Performed services and collected cash of $900.
3. Collected $4,900 of cash in advance for services to be provided over the next 12 months.
4. Provided $12,200 of services on account.
5. Purchased supplies of $470 on account.
Asset Exchange Transactions
6. Purchased $4,200 of land for cash.
7. Collected $7,100 of cash from accounts receivable.
8. Purchased $420 of supplies with cash.
9. Paid $3,700 for one year's rent in advance.
Asset Use Transactions
10. Paid $2,800 cash for salaries of employees.
11. Paid a cash dividend of $1,900 to the stockholders.
12. Paid off $470 of the accounts payable with cash.
Claims Exchange Transactions
13. Placed an advertisement in the local newspaper for $150 on account.
14. Incurred utility expense of $115 on account.
Adjusting Entries
15. Recognized $3,675 of revenue for performing services. The collection of cash for these services occurred in a prior transaction.
(See Event 3.)
16. Recorded $1,480 of accrued salary expense at the end of Year 1.
Transcribed Image Text:a. Record each of the preceding events in T-accounts.
Cash
Accounts Receivable
Beg. Bal
Beg. Bal
End.Bal
End. Bal
Supplies
Prepaid Rent
Beg. Bal
Beg. Bal
End. Bal
End. Bal
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