During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. 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 1 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 S$600.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation,
completed the following transactions.
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 1
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 S$600.
Transcribed Image Text:During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. 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 1 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 S$600.
This Sheet will be used for Requirements 2, 5, and 9.
Requirement #2:
Post the July journal entries to the following T-accounts and compute ending balances.
Cash (111)
Tax Preparation Revenue
Prepaid Insurance (117)
Rent Expense (511)
Supplies (119)
Salaries Expense (512)
Transcribed Image Text:This Sheet will be used for Requirements 2, 5, and 9. Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Tax Preparation Revenue Prepaid Insurance (117) Rent Expense (511) Supplies (119) Salaries Expense (512)
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