The following events apply to Equipment Services Inc. in its first year of operation: 1. Acquired $60,000 cash from the issue of common stock. 2. Received an $8,200 cash advance for services to be provided in the future. 3. Purchased $2,000 of supplies on account. 4. Earned $36,000 of service revenue on account. 5. Incurred $16,100 of operating expenses on account. 6. Collected $28,500 cash from accounts receivable. 7. Made a $15,100 payment on accounts payable. 8. Paid a $2,000 cash dividend to the stockholders. 9. Recognized $1,600 of supplies expense. 0. Recorded $3,100 of accrued salaries expense. 11. Recognized $3,100 of revenue for services provided to the customer in Event 2. Required a. Record the events in T-accounts and determine the ending account balances. b. Test the equality of the debit and credit balances of the T-accounts by preparing a trial balance.
The following events apply to Equipment Services Inc. in its first year of operation: 1. Acquired $60,000 cash from the issue of common stock. 2. Received an $8,200 cash advance for services to be provided in the future. 3. Purchased $2,000 of supplies on account. 4. Earned $36,000 of service revenue on account. 5. Incurred $16,100 of operating expenses on account. 6. Collected $28,500 cash from accounts receivable. 7. Made a $15,100 payment on accounts payable. 8. Paid a $2,000 cash dividend to the stockholders. 9. Recognized $1,600 of supplies expense. 0. Recorded $3,100 of accrued salaries expense. 11. Recognized $3,100 of revenue for services provided to the customer in Event 2. Required a. Record the events in T-accounts and determine the ending account balances. b. Test the equality of the debit and credit balances of the T-accounts by preparing a trial balance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please answer a and b. Answers only.

Transcribed Image Text:### Business Accounting: T-Accounts and Trial Balance
#### Overview of Transactions for Equipment Services Inc.
The following events occurred for Equipment Services Inc. during its first year of operation:
1. **Acquired $60,000 cash** from the issue of common stock.
2. **Received an $8,200 cash advance** for services to be provided in the future.
3. **Purchased $2,000 of supplies** on account.
4. **Earned $36,000 of service revenue** on account.
5. **Incurred $16,100 of operating expenses** on account.
6. **Collected $28,500 cash** from accounts receivable.
7. **Made a $15,100 payment** on accounts payable.
8. **Paid a $2,000 cash dividend** to the stockholders.
9. **Recognized $1,600 of supplies expense**.
10. **Recorded $3,100 of accrued salaries expense**.
11. **Recognized $3,100 of revenue** for services provided to the customer in Event 2.
#### Required Actions
a. **Record the Events in T-Accounts** and determine the ending account balances.
b. **Test the Equality of Debit and Credit Balances** of the T-Accounts by preparing a trial balance.
#### Recording in T-Accounts
Each transaction should be recorded as follows to determine their impact on different accounts (assets, liabilities, equity, revenue, expenses).
- **Common Stock Account**:
Debit: Cash $60,000
Credit: Common Stock $60,000
- **Cash Account**:
Debit: Transactions increasing cash
Credit: Transactions decreasing cash
- **Accounts Receivable**:
Debit: Earned revenue not yet received
Credit: Payments received from receivables
- **Supplies Account**:
Debit: Supplies purchased
Credit: Supplies used/expenses
- **Accounts Payable**:
Debit: Payments made to creditors
Credit: Purchases made on account
- **Salaries Payable**:
Debit: Payment of salaries
Credit: Accrued salaries expense
- **Service Revenue**:
Credit: Earned revenue
- **Expenses**:
Debit: Incurred expenses
- **Dividends**:
Debit: Cash paid to stockholders
#### Preparing a Trial Balance
After recording

Transcribed Image Text:**Recording Transactions in T-Accounts**
**Objective**: To record the events in T-accounts and determine the ending account balances.
### T-Accounts Overview
T-accounts are used to represent the transactions affecting particular accounts in the general ledger in a visually segmented manner. Each T-account consists of two sides: the left side represents debits and the right side represents credits.
### Required A & B
#### Cash
| Beg. Bal | Debit (Left) | Credit (Right) | Ending Bal |
|----------|--------------|----------------|------------|
| | | | |
#### Accounts Receivable
| Beg. Bal | Debit (Left) | Credit (Right) | Ending Bal |
|----------|--------------|----------------|------------|
| | | | |
#### Supplies
| Beg. Bal | Debit (Left) | Credit (Right) | Ending Bal |
|----------|--------------|----------------|------------|
| | | | |
#### Accounts Payable
| Beg. Bal | Debit (Left) | Credit (Right) | Ending Bal |
|----------|--------------|----------------|------------|
| | | | |
#### Salaries Payable
| Beg. Bal | Debit (Left) | Credit (Right) | Ending Bal |
|----------|--------------|----------------|------------|
| | | | |
#### Unearned Revenue
| Beg. Bal | Debit (Left) | Credit (Right) | Ending Bal |
|----------|--------------|----------------|------------|
| | | | |
### Explanation of the T-Account Layout
1. **Labeling**: Each T-account is labeled with the account title at the top (e.g., Cash, Accounts Receivable, Supplies, etc.).
2. **Initial Balances**: The beginning balances (Beg. Bal) for each account are listed on the debit (left) or credit (right) side depending on the normal balance of the account.
3. **Transactions**: Individual transactions are recorded as debits or credits in the respective columns.
4. **Ending Balances**: After all transactions for a period are recorded, the ending balance (End. Bal) is calculated by summing the debits and credits and determining the net effect on the account.
### Purpose
Recording transactions in T-accounts provides a systematic method for tracking how each transaction affects the balance of specific accounts
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