Chapter 1, Problem 1PA

On June 1 of this year, J. Larkin, Optometrist, established the Larkin Eye Clinic. The clinic’s account names are presented below. Transactions completed during the month follow.

1. a. Larkin deposited $25,000 in a bank account in the name of the business.
2. b. Paid the office rent for the month, $950, Ck. No. 1001 (Rent Expense).
3. c. Bought supplies for cash, $357, Ck. No. 1002.
4. d. Bought office equipment on account from NYC Office Equipment Store, $8,956.
5. e. Bought a computer from Warden’s Office Outfitters, $1,636, paying $750 in cash and placing the balance on account, Ck. No. 1003.
6. f. Sold professional services for cash, $3,482 (Professional Fees).
7. g. Paid on account to Warden’s Office Outfitters, $886, Ck. No. 1004.
8. h. Received and paid the bill for utilities, $382, Ck. No. 1005 (Utilities Expense).
9. i. Paid the salary of the assistant, $1,050, Ck. No. 1006 (Salary Expense).
10. j. Sold professional services for cash, $3,295 (Professional Fees).
11. k. Larkin withdrew cash for personal use, $1,250, Ck. No. 1007.

Required

1. 1. In the equation, write the owner’s name above the terms Capital and Drawing.
2. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses.
3. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.