Chapter 2, Problem 4PB

On July 1, K. Resser opened Resser’s Business Services. Resser’s accountant listed the following chart of accounts:

The following transactions were completed during July:

1. a. Resser deposited $25,000 in a bank account in the name of the business.
2. b. Bought tables and chairs for cash, $725, Ck. No. 1200.
3. c. Paid the rent for the current month, $1,750, Ck. No. 1201.
4. d. Bought computers and copy machines from Ferber Equipment, $15,700, paying $4,000 in cash and placing the balance on account, Ck. No. 1202.
5. e. Bought supplies on account from Wiggins’s Distributors, $535.
6. f. Sold services for cash, $1,742.
7. g. Bought insurance for one year, $1,375, Ck. No. 1203.
8. h. Paid on account to Ferber Equipment, $700, Ck. No. 1204.
9. i. Received and paid the electric bill, $438, Ck. No. 1205.
10. j. Paid on account to Wiggins’s Distributors, $315, Ck. No. 1206.
11. k. Sold services to customers for cash for the second half of the month, $820.
12. l. Received and paid the bill for the business license, $75, Ck. No. 1207.
13. m. Paid wages to an employee, $1,200, Ck. No. 1208.
14. n. Resser withdrew cash for personal use, $700, Ck. No. 1209.

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 July 31, 20--.
6. 6. Prepare an income statement for July 31, 20--.
7. 7. Prepare a statement of owner’s equity for July 31, 20--.
8. 8. Prepare a balance sheet as of July 31, 20--. LO 1, 2, 3, 4, 5, 6