College Accounting (Book Only): A Career Approach
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 4PA

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

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--.
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ayco Inc. started its operations in 2022. Its sales during 2022, all on account, totalled $700,000. The company collected $500,000 in cash from customers during the year and wrote off $8,000 in uncollectible accounts. The company set up an allowance for doubtful accounts at December 31, 2022, its fiscal year-end, and determined the account balance to be $14,000.   The unadjusted balances of selected accounts at December 31, 2023 are as follows:     Accounts receivable $ 300,000   Allowance for doubtful accounts (debit)   10,000   Sales revenue (including 80 percent in sales on account)   800,000       Aging of the accounts receivable on December 31, 2023, resulted in an estimate of $11,000 in potentially uncollectible accounts.   Required: 1. Prepare the journal entries to record all the transactions during 2022 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)…

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College Accounting (Book Only): A Career Approach

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