Chapter 2, Problem 4PA

On May 1, B. Bangle opened Self-Wash Laundry. His accountant listed the following chart of accounts:

The following transactions were completed during May:

1. a. Bangle deposited $35,000 in a bank account in the name of the business.
2. b. Bought chairs and tables, paying cash, $1,870, Ck. No. 1000.
3. c. Bought supplies on account from Barnes Supply Company, $225.
4. d. Paid the rent for the current month, $875, Ck. No. 1001.
5. e. Bought washing machines and dryers from Lara Equipment Company, $12,500, paying $3,600 in cash and placing the balance on account, Ck. No. 1002.
6. f. Sold services for cash for the first half of the month, $1,925.
7. g. Bought insurance for one year, $1,560, Ck. No. 1003.
8. h. Paid on account to Lara Equipment Company, $1,800, Ck. No. 1004.
9. i. Received and paid electric bill, $285, Ck. No. 1005.
10. j. Sold services for cash for the second half of the month, $1,835.
11. k. Paid wages to an employee, $940, Ck. No. 1006.
12. l. Bangle withdrew cash for his personal use, $800, Ck. No. 1007.
13. m. Paid on account to Barnes Supply Company, $225, Ck. No. 1008.
14. n. Received and paid bill from the county for sidewalk repair assessment, $280, Ck. No. 1009.

Required

1. 1. Record the owner’s name in the Capital and Drawing T accounts.
2. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts.
3. 3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction.
4. 4. Foot the T accounts and show the balances.
5. 5. Prepare a trial balance as of May 31, 20--.
6. 6. Prepare an income statement for May 31, 20--.
7. 7. Prepare a statement of owner’s equity for May 31, 20--.
8. 8. Prepare a balance sheet as of May 31, 20--.