Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners; Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of $6,000. The business completed the following transactions during June: a. McChesney deposited $10,000 cash in a business bank account to start the company. The company issued common stock to McChesney. b. Paid $300 cash for office supplies. c. Incurred advertising expense on account, $700. d. Paid the following cash expenses: administrative assistant’s salary, $1,400; office rent, $1,000. e. Earned service revenue on account, $8,800. f. Collected cash from customers on account, $1,200. Requirements Open the following T-accounts: Cash; Accounts Receivable; Office Supplies; Accounts Payable; Common Stock; Service Revenue; Salaries Expense; Rent Expense; and Advertising Expense. Post the transactions directly to the accounts without using a journal. Record each transaction by letter. Calculate account balances.
Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners; Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of $6,000. The business completed the following transactions during June: a. McChesney deposited $10,000 cash in a business bank account to start the company. The company issued common stock to McChesney. b. Paid $300 cash for office supplies. c. Incurred advertising expense on account, $700. d. Paid the following cash expenses: administrative assistant’s salary, $1,400; office rent, $1,000. e. Earned service revenue on account, $8,800. f. Collected cash from customers on account, $1,200. Requirements Open the following T-accounts: Cash; Accounts Receivable; Office Supplies; Accounts Payable; Common Stock; Service Revenue; Salaries Expense; Rent Expense; and Advertising Expense. Post the transactions directly to the accounts without using a journal. Record each transaction by letter. Calculate account balances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners; Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of $6,000. The business completed the following transactions during June:
a. McChesney deposited $10,000 cash in a business bank account to start the company. The company issued common stock to McChesney.
b. Paid $300 cash for office supplies.
c. Incurred advertising expense on account, $700.
d. Paid the following cash expenses: administrative assistant’s salary, $1,400; office rent, $1,000.
e. Earned service revenue on account, $8,800.
f. Collected cash from customers on account, $1,200.
Requirements
- Open the following T-accounts: Cash;
Accounts Receivable ; Office Supplies; Accounts Payable; Common Stock; Service Revenue; Salaries Expense; Rent Expense; and Advertising Expense. Post the transactions directly to the accounts without using a journal. Record each transaction by letter. Calculate account balances.
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