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A. Work out the changes for the above transaction. Remember to include the opening capital. Record these in the T-accounts provided in your Workbook. B. For each of the transactions listed below, work out the changes for the transaction and record these changes in the T-accounts.

A. Work out the changes for the above transaction. Remember to include the opening capital. Record these in the T-accounts provided in your Workbook. B. For each of the transactions listed below, work out the changes for the transaction and record these changes in the T-accounts.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Comprehensive Exercise 7. N.A. James, a public accountant, decided to begin a business of his own on October 1, 20-. At that time, he invested in the business a bank balance of $5000 and an automobile worth $18 000. The accounts required are in your Workbook. A. Work out the changes for the above transaction. Remember to include the opening capital. Record these in the T-accounts provided in your Workbook. B. For each of the transactions listed below, work out the changes for the transaction and record these changes in the T-accounts. N.A. JAMES CHART OF ACCOUNTS 101 110 A/R- Jenkins and Co. 120 Office Supplies 125 Office Equipment Bank 302 N.A. James, Drawings 401 Fees Earned 505 Advertising Expense 510 Car Expense 515 Donations Expense 520 Miscellaneous Expense 525 Rent Expense 130 Automobile 201 A/P- Office Equippers 210 Bank Loan 301 N.A. James, Capital TRANSACTIONS 1. Purchased $300 of office supplies for cash. Issued a cheque in pay- ment. (For now, when office supplies are purchased, debit Office Supplies instead of an expense account. You will learn more about handling supplies in Chapter 8.)
Transcribed Image Text:Comprehensive Exercise 7. N.A. James, a public accountant, decided to begin a business of his own on October 1, 20-. At that time, he invested in the business a bank balance of $5000 and an automobile worth $18 000. The accounts required are in your Workbook. A. Work out the changes for the above transaction. Remember to include the opening capital. Record these in the T-accounts provided in your Workbook. B. For each of the transactions listed below, work out the changes for the transaction and record these changes in the T-accounts. N.A. JAMES CHART OF ACCOUNTS 101 110 A/R- Jenkins and Co. 120 Office Supplies 125 Office Equipment Bank 302 N.A. James, Drawings 401 Fees Earned 505 Advertising Expense 510 Car Expense 515 Donations Expense 520 Miscellaneous Expense 525 Rent Expense 130 Automobile 201 A/P- Office Equippers 210 Bank Loan 301 N.A. James, Capital TRANSACTIONS 1. Purchased $300 of office supplies for cash. Issued a cheque in pay- ment. (For now, when office supplies are purchased, debit Office Supplies instead of an expense account. You will learn more about handling supplies in Chapter 8.)
2. Issued a cheque for $50 for an advertisement in a local newspaper. 3. Received a bill from Office Equippers for the purchase of a computer at a total cost of $1100 on account. 4. Mr. James was hired by a client, Jenkins and Co. At the conclusion of the work, Mr. James charged Jenkins and Co. $900 and issued a bill for this service performed on account. 5. B. Masters, a client, paid $100 in cash for a bookkeeping service. W. Shields, another client, paid $75 in cash for having her tax return prepared. The total of $175 was deposited in the bank. 6. A cheque for $100 was sent as a donation to the Canadian Red Cross. 7. A cheque for $300 was received from Jenkins and Co. on account. 8. A cheque for $500 was issued to Office Equippers in partial pay- ment of the balance of its account. 9. Paid Louis's Service Station $120 for gasoline and repairs to the business automobile. A cheque was issued right away. 10. Performed an accounting service for T. Wu and received $200 cash in full payment. The owner, N.A. James, did not deposit this money in the bank, but kept it for his personal use. 11. Issued a cheque for $750 in payment of the rent for the month of October. 12. Purchased $120 of office supplies from Home & Office. The pur- chase was paid for by cheque. 13. Issued a cheque for $50 for an advertisement in a local newspaper. 14. Sold services for $600 to Jenkins and Co. for accounting services. Jenkins and Co. had 30 days to pay this bill. 15. Issued a cheque for $70 for postage stamps. (Note: Stamps are not considered to be supplies.) 16. Issued a cheque for $1500 to the owner for his personal use. 17. Borrowed $5000 from the bank, repayable on demand. C. Balance the ledger by means of a trial balance. D. Prepare an income statement for the period, which is the month of October 20-. E. Prepare a balance sheet with an expanded equity section. Use the one shown in Figure 5.8 on page 155 as your guide.
Transcribed Image Text:2. Issued a cheque for $50 for an advertisement in a local newspaper. 3. Received a bill from Office Equippers for the purchase of a computer at a total cost of $1100 on account. 4. Mr. James was hired by a client, Jenkins and Co. At the conclusion of the work, Mr. James charged Jenkins and Co. $900 and issued a bill for this service performed on account. 5. B. Masters, a client, paid $100 in cash for a bookkeeping service. W. Shields, another client, paid $75 in cash for having her tax return prepared. The total of $175 was deposited in the bank. 6. A cheque for $100 was sent as a donation to the Canadian Red Cross. 7. A cheque for $300 was received from Jenkins and Co. on account. 8. A cheque for $500 was issued to Office Equippers in partial pay- ment of the balance of its account. 9. Paid Louis's Service Station $120 for gasoline and repairs to the business automobile. A cheque was issued right away. 10. Performed an accounting service for T. Wu and received $200 cash in full payment. The owner, N.A. James, did not deposit this money in the bank, but kept it for his personal use. 11. Issued a cheque for $750 in payment of the rent for the month of October. 12. Purchased $120 of office supplies from Home & Office. The pur- chase was paid for by cheque. 13. Issued a cheque for $50 for an advertisement in a local newspaper. 14. Sold services for $600 to Jenkins and Co. for accounting services. Jenkins and Co. had 30 days to pay this bill. 15. Issued a cheque for $70 for postage stamps. (Note: Stamps are not considered to be supplies.) 16. Issued a cheque for $1500 to the owner for his personal use. 17. Borrowed $5000 from the bank, repayable on demand. C. Balance the ledger by means of a trial balance. D. Prepare an income statement for the period, which is the month of October 20-. E. Prepare a balance sheet with an expanded equity section. Use the one shown in Figure 5.8 on page 155 as your guide.
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