During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions.
During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation,
completed the following transactions.
July 1 Began business by making a deposit in a company bank account of $60,000, in exchange
for 6,000 shares of $10 par value common stock.
July 3 Paid the current month's rent, $3,500
July 5 Paid the premium on a 1-year insurance policy, $4,200
July 7 Purchased supplies on account from Little Company, $1,000.
July 10 Paid employee salaries, $3,500
July 14 Purchased equipment from Lake Company, $10,000. Paid $2,500 down and the balance was
placed on account. Payments will be $500.00 per month until the equipment is paid. The first payment is due 8/1.
Note: Use accounts payable for the balance due.
July 15 Received cash for preparing tax returns for the first half of July, $8,000
July 19 Made payment on account to Lake Company, $500.
July 31 Received cash for preparing tax returns for the last half of July, $9,000
July 31 Declared and paid cash dividends of $600.
Post the July
Cash (111) Tax Preparation Revenue
Prepaid Insurance (117) Rent Expense (511)
Supplies (119) Salaries Expense (512)
Equipment (144) Insurance Expense (513)
Accounts Payable (212) Depreciation Expense (515)
Income Tax Payable (213) Income Tax Expense (516)
Common Stock (311)
Dividends (313
Income Summary
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