Required information The following information applies to the questions displayed below] Following are the transactions of a new company called Pose-for-Pics. August 1 M. Harris, the owner, invested $14,500 cash and $62,350 of photography equipment in the company. August 2 The company paid $4,000 cash for an insurance policy covering the next 24 months. August 5 The company purchased supplies for $2,755 cash. August 20 The company received $2,950 cash from taking photos for customers. August 31 The company paid $885 cash for August utilities.
Required information The following information applies to the questions displayed below] Following are the transactions of a new company called Pose-for-Pics. August 1 M. Harris, the owner, invested $14,500 cash and $62,350 of photography equipment in the company. August 2 The company paid $4,000 cash for an insurance policy covering the next 24 months. August 5 The company purchased supplies for $2,755 cash. August 20 The company received $2,950 cash from taking photos for customers. August 31 The company paid $885 cash for August utilities.
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter14: Accounting For Uncollectible Accounts Receivable
Section14.3: Promissory Notes
Problem 1WT
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Question
![### Educational Exercise: Understanding Journal Entries and Ledger Accounts
#### Transactions of a New Company: Pose-for-Pics
**Required Information:**
*The following information applies to the questions displayed below.*
**Transactions:**
1. **August 1:** M. Harris, the owner, invested $14,580 cash and $62,350 of photography equipment in the company.
2. **August 2:** The company paid $4,000 cash for an insurance policy covering the next 24 months.
3. **August 5:** The company purchased supplies for $2,755 cash.
4. **August 20:** The company received $2,950 cash from taking photos for customers.
5. **August 31:** The company paid $885 cash for August utilities.
**Task:**
Open a ledger account for Cash in balance column format. Post general journal entries that impact cash from the above transactions to the ledger account for cash.
---
### Ledger Account for Cash
**Ledger Account Number:** 101: Cash
| Date | Description | Debit | Credit | Balance |
|------------|-------------|-------|--------|---------|
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
---
### Explanation of Transactions and Ledger Entries
1. **August 1 - Owner's Investment:**
- **Debit:** Cash $14,580
- **Credit:** Owner’s Equity / Capital $14,580
- **Balance:** The initial cash balance after the owner's investment.
2. **August 2 - Payment for Insurance Policy:**
- **Debit:** Insurance Expense / Prepaid Insurance $4,000
- **Credit:** Cash $4,000
- **Balance:** Cash balance decreases by the amount paid for the insurance policy.
3. **August 5 - Purchase of Supplies:**
- **Debit:** Supplies $2,755
- **Credit:** Cash $2,755
- **Balance:** Cash balance decreases by the amount spent on supplies.
4. **August 20 - Revenue from Taking Photos:**
- **Debit:** Cash $2,950
- **Credit:** Revenue / Service Income $2,950
- **Balance:** Cash balance increases by the](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F998c9a4a-b16c-4088-839d-963c36fda162%2Fed5588d0-93ae-4be3-8b5f-0a92f81a8561%2F19py5u_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Educational Exercise: Understanding Journal Entries and Ledger Accounts
#### Transactions of a New Company: Pose-for-Pics
**Required Information:**
*The following information applies to the questions displayed below.*
**Transactions:**
1. **August 1:** M. Harris, the owner, invested $14,580 cash and $62,350 of photography equipment in the company.
2. **August 2:** The company paid $4,000 cash for an insurance policy covering the next 24 months.
3. **August 5:** The company purchased supplies for $2,755 cash.
4. **August 20:** The company received $2,950 cash from taking photos for customers.
5. **August 31:** The company paid $885 cash for August utilities.
**Task:**
Open a ledger account for Cash in balance column format. Post general journal entries that impact cash from the above transactions to the ledger account for cash.
---
### Ledger Account for Cash
**Ledger Account Number:** 101: Cash
| Date | Description | Debit | Credit | Balance |
|------------|-------------|-------|--------|---------|
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
---
### Explanation of Transactions and Ledger Entries
1. **August 1 - Owner's Investment:**
- **Debit:** Cash $14,580
- **Credit:** Owner’s Equity / Capital $14,580
- **Balance:** The initial cash balance after the owner's investment.
2. **August 2 - Payment for Insurance Policy:**
- **Debit:** Insurance Expense / Prepaid Insurance $4,000
- **Credit:** Cash $4,000
- **Balance:** Cash balance decreases by the amount paid for the insurance policy.
3. **August 5 - Purchase of Supplies:**
- **Debit:** Supplies $2,755
- **Credit:** Cash $2,755
- **Balance:** Cash balance decreases by the amount spent on supplies.
4. **August 20 - Revenue from Taking Photos:**
- **Debit:** Cash $2,950
- **Credit:** Revenue / Service Income $2,950
- **Balance:** Cash balance increases by the
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