After researching the different forms of business organization, Larry decides to operate "LLM" as a corporation. He then starts the process of getting the business running. In April 2020, the following activities take place. April: 8 He opens a bank account under the name "LLM" and transfers $500 from his personal account to the new account in exchange for common stock. Larry pays $65 to have advertising brochures and posters printed. He plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) He buys lawn care supplies for $125 cash. Larry buys a lawn mower that originally cost him $1,750. Larry realizes that his initial cash investment is not enough. His grandmother lends him $2,000 cash, for which Larry signs a note payable in the name of the business. Larry deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.) He buys more equipment for $900 cash. He mows his first lawn and collects $125 cash. Larry books his second lawn for May 4th for $150. He receives $30 cash in advance as a down payment. Larry pays $1,320 for a one-year insurance policy that will expire on December 1, 2020. 11 13 14 16 17 20 25 30 Instructions (a) Prepare journal entries to record the April transactions. (b) Post the journal entries to general ledger accounts, using T-accounts. (c) Prepare a trial balance at April 30.
After researching the different forms of business organization, Larry decides to operate "LLM" as a corporation. He then starts the process of getting the business running. In April 2020, the following activities take place. April: 8 He opens a bank account under the name "LLM" and transfers $500 from his personal account to the new account in exchange for common stock. Larry pays $65 to have advertising brochures and posters printed. He plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) He buys lawn care supplies for $125 cash. Larry buys a lawn mower that originally cost him $1,750. Larry realizes that his initial cash investment is not enough. His grandmother lends him $2,000 cash, for which Larry signs a note payable in the name of the business. Larry deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.) He buys more equipment for $900 cash. He mows his first lawn and collects $125 cash. Larry books his second lawn for May 4th for $150. He receives $30 cash in advance as a down payment. Larry pays $1,320 for a one-year insurance policy that will expire on December 1, 2020. 11 13 14 16 17 20 25 30 Instructions (a) Prepare journal entries to record the April transactions. (b) Post the journal entries to general ledger accounts, using T-accounts. (c) Prepare a trial balance at April 30.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 71TA
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Transcribed Image Text:Larry's Lawn Mowing Corp. (aka LLM Corp.)
After researching the different forms of business organization, Larry decides
to operate "LLM" as a corporation. He then starts the process of getting the
business running. In April 2020, the following activities take place.
April:
8
He opens a bank account under the name "LLM" and transfers
$500 from his personal account to the new account in exchange
for common stock.
Larry pays $65 to have advertising brochures and posters
printed. He plans to distribute these as opportunities arise.
(Hint: Use Advertising Expense.)
He buys lawn care supplies for $125 cash.
Larry buys a lawn mower that originally cost him $1,750.
Larry realizes that his initial cash investment is not enough. His
grandmother lends him $2,000 cash, for which Larry signs a
note payable in the name of the business. Larry deposits the
money in the business bank account. (Hint: The note does not
have to be repaid for 24 months. As a result, the notes payable
should be reported in the accounts as the last liability and also
on the balance sheet as the last liability.)
He buys more equipment for $900 cash.
He mows his first lawn and collects $125 cash.
Larry books his second lawn for May 4th for $150. He receives
$30 cash in advance as a down payment.
Larry pays $1,320 for a one-year insurance policy that will
expire on December 1, 2020.
11
13
14
16
17
20
25
30
Instructions
(a) Prepare journal entries to record the April transactions.
(b) Post the journal entries to general ledger accounts, using T-accounts.
(c) Prepare a trial balance at April 30.
Weygandt, Financial and Managerial Accounting, 20, LLM
Copyright 2015 John Wiley & Sons, Inc.
(For Instouctor LInn Onlud
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