Homework Help is Here – Start Your Trial Now!
Business
Accounting
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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Please answer a and b. Answers only.
### 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:### 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
**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
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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Information
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS