On October 1, 2021, TIM, Inc. started as a mobile application development company. A summary of transactions through December 31, 2021 is presented below. 1. Stockholders invested $50,000 in cash in Bank Boston in the name of the business. 2. New computer equipment is purchased for $6,000 in cash 3. Computer accessories are purchased from ABC Computer Store. The amount of accessories is $2,000 and ABC Computer Store agrees to receive the amount of the bill in the following days of October 4. The company receives $3,000 cash from its customer for mobile application development service it has performed. 5. The company gives an advertisement on the internet and receives a bill for $ 500 from the advertisement agency. The agency agrees to receive the amount of the bill in the following days of October 6. The company performs $4,000 of mobile application development service for its client. The client pays $2,000 in cash and states that the rest of this amount will be paid later. 7. The salaries of employees of $3,000 and office rent of $1,000 is paid in cash. 8. The company pays its $1,000 ABC Computer Store bill (Transaction 3) and $500 advertisement agency bill (Transaction 5). 9. The customer pays the $2,000 cash to TIM. It is the unpaid amount of the bill for mobile application development service performed by the company (Transaction 6). 10. Dividends of $500 paid to existing shareholders. 11. The company issues 10,000 shares of stock at $20 par- value.
On October 1, 2021, TIM, Inc. started as a mobile application development company. A summary of transactions through December 31, 2021 is presented below. 1. Stockholders invested $50,000 in cash in Bank Boston in the name of the business. 2. New computer equipment is purchased for $6,000 in cash 3. Computer accessories are purchased from ABC Computer Store. The amount of accessories is $2,000 and ABC Computer Store agrees to receive the amount of the bill in the following days of October 4. The company receives $3,000 cash from its customer for mobile application development service it has performed. 5. The company gives an advertisement on the internet and receives a bill for $ 500 from the advertisement agency. The agency agrees to receive the amount of the bill in the following days of October 6. The company performs $4,000 of mobile application development service for its client. The client pays $2,000 in cash and states that the rest of this amount will be paid later. 7. The salaries of employees of $3,000 and office rent of $1,000 is paid in cash. 8. The company pays its $1,000 ABC Computer Store bill (Transaction 3) and $500 advertisement agency bill (Transaction 5). 9. The customer pays the $2,000 cash to TIM. It is the unpaid amount of the bill for mobile application development service performed by the company (Transaction 6). 10. Dividends of $500 paid to existing shareholders. 11. The company issues 10,000 shares of stock at $20 par- value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Required:
1. Identify each financial transaction by using accountingequation and make journal entries of financialtransactions
2. Transfer the journal entries to the Ledger
3. Prepare the Trail Balance of the company
Transcribed Image Text:On October 1, 2021, TIM, Inc. started as a mobile application
development company. A summary of transactions through
December 31, 2021 is presented below.
1. Stockholders invested $50,000 in cash in Bank Boston in
the name of the business.
2. New computer equipment is purchased for $6,000 in cash
3. Computer accessories are purchased from ABC
Computer Store. The amount of accessories is $2,000 and
ABC Computer Store agrees to receive the amount of the
bill in the following days of October
4. The company receives $3,000 cash from its customer for
mobile application development service it has performed.
5. The company gives an advertisement on the internet and
receives a bill for $ 500 from the advertisement agency.
The agency agrees to receive the amount of the bill in the
following days of October
6. The company performs $4,000 of mobile application
development service for its client. The client pays $2,000
in cash and states that the rest of this amount will be paid
later.
7. The salaries of employees of $3,000 and office rent of
$1,000 is paid in cash.
8. The company pays its $1,000 ABC Computer Store bill
(Transaction 3) and $500 advertisement agency bill
(Transaction 5).
9. The customer pays the $2,000 cash to TIM. It is the
unpaid amount of the bill for mobile application
development service performed by the company
(Transaction 6).
10. Dividends of $500 paid to existing shareholders.
11. The company issues 10,000 shares of stock at $20 par-
value.
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