College Accounting (Book Only): A Career Approach
13th Edition
ISBN: 9781337280570
Author: Scott, Cathy J.
Publisher: South-Western College Pub
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Chapter 2, Problem 1PB
During February of this year, H. Rose established Rose Shoe Hospital. The following asset, liability, and owner’s equity accounts are included in the chart of accounts:
The following transactions occurred during the month of February:
- a. Rose deposited $25,000 cash in a bank account in the name of the business.
- b. Bought shop equipment for cash, $1,525, Ck. No. 1000.
- c. Bought advertising on account from Milland Company, $325.
- d. Bought store shelving on account from Inger Hardware, $750.
- e. Bought office equipment from Shara’s Office Supply, $625, paying $225 in cash and placing the balance on account, Ck. No. 1001.
- f. Paid on account to Inger Hardware, $750, Ck. No. 1002.
- g. Rose invested his personal leather working tools with a fair market value of $800 in the business
- h. Sold services for the month of February for cash, $250.
PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions
Required
- 1. Write the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental
accounting equation , as well as the plus and minus signs and Debit and Credit. - 2. Write the account names on the T accounts under the classifications, place the plus and minus signs for each T account, and label the debit and credit sides of the T accounts.
- 3. Record the amounts in the proper positions in the T accounts. Write the letter next to each entry to identify the transaction.
- 4. Foot and balance the accounts.
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Chapter 2 Solutions
College Accounting (Book Only): A Career Approach
Ch. 2 - Determine the balance of the following T account:
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