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Traf Enterprises incorporated on May 3, 2011. The company engaged in the following transactions during its first month of operations: May 3 Issued capital stock in exchange for $800,000 cash. May 4 Paid May office rent expense of $1,000. May 5 Purchased office supplies for $400 cash. May 15 Purchased office equipment for $8,000 on account. May 18 Purchased a company car for $27,000. Paid $7,000 cash and issued a note payable forthe remaining amount owed. May 20 Billed clients $32,000 on account. May 26 Declared a $5,000 dividend; distributed to shareholders on June 26. May 29 Paid May utilities of $200. May 30 Received $30,000 from clients billed on May 20. May 31 Recorded and paid salary expense of $14,000. Apply concept of financial accounting : a. Prepare journal entries, including explanations, for the above transactions. b. Post each entry to the appropriate ledger accounts (T accounts). c. Prepare a trial balance dated May 31, 2011.

Traf Enterprises incorporated on May 3, 2011. The company engaged in the following transactions during its first month of operations: May 3 Issued capital stock in exchange for $800,000 cash. May 4 Paid May office rent expense of $1,000. May 5 Purchased office supplies for $400 cash. May 15 Purchased office equipment for $8,000 on account. May 18 Purchased a company car for $27,000. Paid $7,000 cash and issued a note payable forthe remaining amount owed. May 20 Billed clients $32,000 on account. May 26 Declared a $5,000 dividend; distributed to shareholders on June 26. May 29 Paid May utilities of $200. May 30 Received $30,000 from clients billed on May 20. May 31 Recorded and paid salary expense of $14,000. Apply concept of financial accounting : a. Prepare journal entries, including explanations, for the above transactions. b. Post each entry to the appropriate ledger accounts (T accounts). c. Prepare a trial balance dated May 31, 2011.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Traf Enterprises incorporated on May 3, 2011. The company engaged in the following transactions during its first month of operations: May 3 Issued capital stock in exchange for $800,000 cash. May 4 Paid May office rent expense of $1,000. May 5 Purchased office supplies for $400 cash. May 15 Purchased office equipment for $8,000 on account. May 18 Purchased a company car for $27,000. Paid $7,000 cash and issued a note payable forthe remaining amount owed. May 20 Billed clients $32,000 on account. May 26 Declared a $5,000 dividend; distributed to shareholders on June 26. May 29 Paid May utilities of $200. May 30 Received $30,000 from clients billed on May 20. May 31 Recorded and paid salary expense of $14,000. Apply concept of financial accounting: a. Prepare journal entries, including explanations, for the above transactions. b. Post each entry to the appropriate ledger accounts (T accounts). c. Prepare a trial balance dated May 31, 2011.
Transcribed Image Text:Traf Enterprises incorporated on May 3, 2011. The company engaged in the following transactions during its first month of operations: May 3 Issued capital stock in exchange for $800,000 cash. May 4 Paid May office rent expense of $1,000. May 5 Purchased office supplies for $400 cash. May 15 Purchased office equipment for $8,000 on account. May 18 Purchased a company car for $27,000. Paid $7,000 cash and issued a note payable forthe remaining amount owed. May 20 Billed clients $32,000 on account. May 26 Declared a $5,000 dividend; distributed to shareholders on June 26. May 29 Paid May utilities of $200. May 30 Received $30,000 from clients billed on May 20. May 31 Recorded and paid salary expense of $14,000. Apply concept of financial accounting: a. Prepare journal entries, including explanations, for the above transactions. b. Post each entry to the appropriate ledger accounts (T accounts). c. Prepare a trial balance dated May 31, 2011.
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