Chapter 1, Problem 1SP

To determine

Concept introduction:

Expense: The movement of money or assets from one company to other company in the form of payment for the service or an item is called expense.

Account Receivables: For delivered goods or services, the cash owed by the customer that they need to pay to the business is called account payables. In the balances sheet, the account payables are shown as assets.

Account Payables: For delivered goods or services, the cash owed by the business that they are required to pay to their suppliers is called the account payables. In the balances sheet, the account payables are shown as liabilities.

To determine: The statement showing accounting transaction with new balance after each transaction

Explanation of Solution

Date	Cash	Accounts Receivable	Computer Supplies	Computer System	Office Equipment	Accounts Payable	S.Rey, Capital	With drawls	Revenues	Expenses
Oct.1	45000			20000	8000		73000
Balance	45,000			2,0000	8,000		7,3000
Oct.3			1420			1420
Balance	45000		1420	20000	8000	1420	73000
Oct.6		4,800							4800
Balance	45000	4,800	1420	20000	8000	1420	73000		4800
Oct.8	-1420					-1420
Balance	43,580	4,800	1420	20000	8000	0	73000		4800
Oct.12		1,400							1400
Balance	43,580	6,200	1,420	20,000	8,000	0	73,000		6,200
Oct.15	4800	-4800
Balance	48,380	1,400	1,420	20,000	8,000	0	73,000		6,200
Oct.17	-805									805
Balance	47,575	1,400	1,420	20,000	8,000	0	73,000		6,200	805
Oct.20	-1728									1728
Balance	45,847	1,400	1,420	20,000	8,000	0	73,000		6,200	2,533
Oct.22	1400	-1400
Balance	47,247	0	1,420	20,000	8,000	0	73,000		6,200	2,533
Oct.28		5208							5208
Balance	47,247	5,208	1,420	20,000	8,000	0	73,000		11,408	2,533
Oct.31	-875									875
Balance	46,372	5,208	1,420	20,000	8,000	0	73,000		11,408	3,408
Oct.31	-3600							3600
Balance	42772	5208+	1420	20000	8000	0	73000	3600	11408	3408

1. On Oct.1 S. Rey brings $45,000 of cash, $20,000 computer system and $8,000 of office equipment as capital. The entry on book would be:

Cash A/c $45,000

Computer System $20,000

Office equipment $8,000

To Capital A/c $73,000

2. On Oct.3 Company purchased Computer supplies of $1420 on credit from Harris office Products.

Computer Supplies A/c $1,420 Dr

Trade Payable A/c $1,420 Cr

3. On Oct.6 Company billed Easy Leasing $4,800 for services performed installing new web server.

Trade Receivable A/c $4,800 Dr

Revenue from services A/c $4,800 Cr

4. On Oct.8 Company Paid $1420 to Harris office by cash

Trade Payable A/c $1,420 Dr

Cash A/c $1,420 Cr

5. On Oct.12 Company billed Easy Leasing $1,420 for services performed installing new web server.

Trade Receivable A/c $1,420 Dr

Revenue from services A/c $1,420 Cr

6. On Oct.15 Company Receives $4,800 from Easy Leasing by cash

Cash A/c $4,800 Dr

Trade Receivables A/c $4,800 Cr

7. On Oct.17 Company paid $805 Cash for Repair of Computer

Indirect Expenses (Computer Repair & Maintenance) A/c $ 805 Dr

Cash A/c $ 805 Cr

8. On Oct.20 Company Paid Cash $ 1,728 for Advertisement

Indirect Expenses (Advertisement) A/c $ 1,728 Dr

Cash A/c $ 1,728 Cr

9. On Oct.22 Company Receives $ 1,400 from Easy Leasing by Cash

Cash A/c $4,800 Dr

Trade Receivables A/c $4,800 Cr

10. On Oct.28 Company billed IFM Company $ 5,208 for Services

Trade Receivable A/c $5,208 Dr

Revenue from services A/c $5,208 Cr

11. On Oct.31 Company Paid Wages $ 875 by cash to Lyn Addie’s

Indirect Expenses (Salary & Wages) A/c $ 875 Dr

Cash A/c $ 875 Cr

12. On Oct.31 S. Rey withdrew $ 3,600 cash for personal use

Capital A/c $ 3,600 Dr

Cash A/c $ 3,600 Cr