Problem 2-6B The Accounting Cycle Sweetwater Temporary Clerical Help Service opened for business in June 2019. From the opening until the end of the year. Sweetwater engaged in the activities described below. So that a realistic trial balance can be prepared, the events described below are aggregations of many individual events. Sold 10,000 shares of common stock for $4.50 per share. Purchased office equipment from Furniture Max Inc. for $18,110 cash. Received $112,880 from clients for services provided. Paid wages $87,300. Borrowed $20,000 from the Bank of America on a 3-year note payable. Paid office rent of $10,200 Purchased office supplies on credit for $2,120 from Office Supply Inc. Paid $1,200 toward the payable established in Transaction g. Paid utility charges incurred during the year of $3,250. Required: 1. Analyze the events for their effect on the accounting equation. 2. Prepare journal entries . (Note: Ignore the date because these events are aggregations of individual events) 3. Post the journal entries to T-accounts. 4. Prepare a trial balance at December 31, 2019.

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Answer 1

Textbook Question

Chapter 2, Problem 61BPSB

Problem 2-6B The Accounting Cycle

Sweetwater Temporary Clerical Help Service opened for business in June 2019. From the opening until the end of the year. Sweetwater engaged in the activities described below. So that a realistic trial balance can be prepared, the events described below are aggregations of many individual events.

Sold 10,000 shares of common stock for $4.50 per share.
Purchased office equipment from Furniture Max Inc. for $18,110 cash.
Received $112,880 from clients for services provided.
Paid wages $87,300.
Borrowed $20,000 from the Bank of America on a 3-year note payable.
Paid office rent of $10,200
Purchased office supplies on credit for $2,120 from Office Supply Inc.
Paid $1,200 toward the payable established in Transaction g.
Paid utility charges incurred during the year of $3,250.

Required:

1. Analyze the events for their effect on the accounting equation.

2. Prepare journal entries. (Note: Ignore the date because these events are aggregations of individual events)

3. Post the journal entries to T-accounts.

4. Prepare a trial balance at December 31, 2019.

Expert Solution

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Requirement 1

Determine:

Analyze the events for their effect on the accounting equation.

Answer to Problem 61BPSB

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	$45,000		$45,000
b.	18,710
	(18,710)
c.	112,880		112,880
d.	(87,300)		(87,300)
e.	20,000	20,000
f.	(10,200)		(10,200)
g.	2,120	2,120
h.	(1,200)	(1,200)
i.	(3,250)		(3,250)

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase		Increase
b.	Increase
	Decrease
c.	Increase		Increase
d.	Decrease		Decrease
e.	Increase	Increase
f.	Decrease		Decrease
g.	Increase	Increase
h.	Decrease	Decrease
i.	Decrease		Decrease

Expert Solution

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement 2

To Prepare:

Prepare journal entries for the transaction during 2019.

Answer to Problem 61BPSB

Events	Accounts and Explanation	Debit	Credit
a.	Cash	$45,000
	Common Stock		$45,000

b.	Equipment	18,710
	Cash		18,710

c.	Cash	112,880
	Service Revenue		112,880

d.	Wages Expense	87,300
	Cash		87,300

e.	Cash	20,000
	Notes Payable		20,000

f.	Rent Expense	10,200
	Cash		10,200

g.	Supplies
	Accounts Payable	2,120
			2,120

h.	Accounts Payable	1,200
	Cash		1,200

i.	Utilities Expense	3,250
	Cash		3,250

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase (Cash)		Increase (Common Stock)
b.	Increase (Equipment)
	Decrease (Cash)
c.	Increase (Cash)		Increase (Service Revenue)
d.	Decrease (Cash)		Decrease (Wages Expense)
e.	Increase (Cash)	Increase (Notes Payable)
f.	Decrease (Cash)		Decrease (Rent Expense)
g.	Increase (Supplies)	Increase (Accounts Payable)
h.	Decrease (Cash)	Decrease (Accounts Payable)
i.	Decrease (Cash)		Decrease (Utilities Expense)

Expert Solution

To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 3

Prepare:

Posting the journal entries to T-accounts.

Answer to Problem 61BPSB

Accounts	Balance
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable	920
Notes Payable	20,000
Common Stock	45,000
Service Revenue	112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300

Explanation of Solution

Cash

a. 45,000 c. 112,880 e. 20,000	b. 18,710 d. 87,300 f. 10,200 h. 1,200 i. 3,250
Bal. 57,220

Supplies

g. 2,120
Bal. 2,120

Equipment

b. 18,710
Bal. 18,710

Accounts Payable

h. 1,200	g. 2,120
	Bal. 920

Notes Payable

	e. 20,000
	Bal. 20,000

Common Stock

	a. 45,000
	Bal. 45,000

Service Revenue

	c. 112,880
	Bal. 112,880

Rent Expense

f. 10,200
Bal. 10,200

Utilities Expense

i. 3,250

Wages Expense

d. 87,300
Bal. 87,300

Expert Solution

To determine

Trial Balance:

A financial statement which integrates all the balance of ledger accounts is termed as a trial balance. The total balance of debit and credit in trial balance should be equal at end of an accounting period.

Requirement 3

Prepare:

Prepare the trial balance as of December 31, 2019.

Answer to Problem 61BPSB

The total balance of the trial balance for the year ending December 31, 2019 is $178,800.

Explanation of Solution

Sweetwater Temporary Clerical Help ServiceTrial Balance December 31, 2019
Accounts	Debit	Credit
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable		$920
Notes Payable		20,000
Common Stock		45,000
Service Revenue		112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300
Total	$178,800	$178,800

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Answer 2

Textbook Question

Chapter 2, Problem 61BPSB

Problem 2-6B The Accounting Cycle

Sweetwater Temporary Clerical Help Service opened for business in June 2019. From the opening until the end of the year. Sweetwater engaged in the activities described below. So that a realistic trial balance can be prepared, the events described below are aggregations of many individual events.

Sold 10,000 shares of common stock for $4.50 per share.
Purchased office equipment from Furniture Max Inc. for $18,110 cash.
Received $112,880 from clients for services provided.
Paid wages $87,300.
Borrowed $20,000 from the Bank of America on a 3-year note payable.
Paid office rent of $10,200
Purchased office supplies on credit for $2,120 from Office Supply Inc.
Paid $1,200 toward the payable established in Transaction g.
Paid utility charges incurred during the year of $3,250.

Required:

1. Analyze the events for their effect on the accounting equation.

2. Prepare journal entries. (Note: Ignore the date because these events are aggregations of individual events)

3. Post the journal entries to T-accounts.

4. Prepare a trial balance at December 31, 2019.

Expert Solution

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Requirement 1

Determine:

Analyze the events for their effect on the accounting equation.

Answer to Problem 61BPSB

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	$45,000		$45,000
b.	18,710
	(18,710)
c.	112,880		112,880
d.	(87,300)		(87,300)
e.	20,000	20,000
f.	(10,200)		(10,200)
g.	2,120	2,120
h.	(1,200)	(1,200)
i.	(3,250)		(3,250)

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase		Increase
b.	Increase
	Decrease
c.	Increase		Increase
d.	Decrease		Decrease
e.	Increase	Increase
f.	Decrease		Decrease
g.	Increase	Increase
h.	Decrease	Decrease
i.	Decrease		Decrease

Expert Solution

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement 2

To Prepare:

Prepare journal entries for the transaction during 2019.

Answer to Problem 61BPSB

Events	Accounts and Explanation	Debit	Credit
a.	Cash	$45,000
	Common Stock		$45,000

b.	Equipment	18,710
	Cash		18,710

c.	Cash	112,880
	Service Revenue		112,880

d.	Wages Expense	87,300
	Cash		87,300

e.	Cash	20,000
	Notes Payable		20,000

f.	Rent Expense	10,200
	Cash		10,200

g.	Supplies
	Accounts Payable	2,120
			2,120

h.	Accounts Payable	1,200
	Cash		1,200

i.	Utilities Expense	3,250
	Cash		3,250

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase (Cash)		Increase (Common Stock)
b.	Increase (Equipment)
	Decrease (Cash)
c.	Increase (Cash)		Increase (Service Revenue)
d.	Decrease (Cash)		Decrease (Wages Expense)
e.	Increase (Cash)	Increase (Notes Payable)
f.	Decrease (Cash)		Decrease (Rent Expense)
g.	Increase (Supplies)	Increase (Accounts Payable)
h.	Decrease (Cash)	Decrease (Accounts Payable)
i.	Decrease (Cash)		Decrease (Utilities Expense)

Expert Solution

To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 3

Prepare:

Posting the journal entries to T-accounts.

Answer to Problem 61BPSB

Accounts	Balance
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable	920
Notes Payable	20,000
Common Stock	45,000
Service Revenue	112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300

Explanation of Solution

Cash

a. 45,000 c. 112,880 e. 20,000	b. 18,710 d. 87,300 f. 10,200 h. 1,200 i. 3,250
Bal. 57,220

Supplies

g. 2,120
Bal. 2,120

Equipment

b. 18,710
Bal. 18,710

Accounts Payable

h. 1,200	g. 2,120
	Bal. 920

Notes Payable

	e. 20,000
	Bal. 20,000

Common Stock

	a. 45,000
	Bal. 45,000

Service Revenue

	c. 112,880
	Bal. 112,880

Rent Expense

f. 10,200
Bal. 10,200

Utilities Expense

i. 3,250

Wages Expense

d. 87,300
Bal. 87,300

Expert Solution

To determine

Trial Balance:

A financial statement which integrates all the balance of ledger accounts is termed as a trial balance. The total balance of debit and credit in trial balance should be equal at end of an accounting period.

Requirement 3

Prepare:

Prepare the trial balance as of December 31, 2019.

Answer to Problem 61BPSB

The total balance of the trial balance for the year ending December 31, 2019 is $178,800.

Explanation of Solution

Sweetwater Temporary Clerical Help ServiceTrial Balance December 31, 2019
Accounts	Debit	Credit
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable		$920
Notes Payable		20,000
Common Stock		45,000
Service Revenue		112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300
Total	$178,800	$178,800

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Answer 3

Textbook Question

Chapter 2, Problem 61BPSB

Problem 2-6B The Accounting Cycle

Sweetwater Temporary Clerical Help Service opened for business in June 2019. From the opening until the end of the year. Sweetwater engaged in the activities described below. So that a realistic trial balance can be prepared, the events described below are aggregations of many individual events.

Sold 10,000 shares of common stock for $4.50 per share.
Purchased office equipment from Furniture Max Inc. for $18,110 cash.
Received $112,880 from clients for services provided.
Paid wages $87,300.
Borrowed $20,000 from the Bank of America on a 3-year note payable.
Paid office rent of $10,200
Purchased office supplies on credit for $2,120 from Office Supply Inc.
Paid $1,200 toward the payable established in Transaction g.
Paid utility charges incurred during the year of $3,250.

Required:

1. Analyze the events for their effect on the accounting equation.

2. Prepare journal entries. (Note: Ignore the date because these events are aggregations of individual events)

3. Post the journal entries to T-accounts.

4. Prepare a trial balance at December 31, 2019.

Expert Solution

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Requirement 1

Determine:

Analyze the events for their effect on the accounting equation.

Answer to Problem 61BPSB

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	$45,000		$45,000
b.	18,710
	(18,710)
c.	112,880		112,880
d.	(87,300)		(87,300)
e.	20,000	20,000
f.	(10,200)		(10,200)
g.	2,120	2,120
h.	(1,200)	(1,200)
i.	(3,250)		(3,250)

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase		Increase
b.	Increase
	Decrease
c.	Increase		Increase
d.	Decrease		Decrease
e.	Increase	Increase
f.	Decrease		Decrease
g.	Increase	Increase
h.	Decrease	Decrease
i.	Decrease		Decrease

Expert Solution

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement 2

To Prepare:

Prepare journal entries for the transaction during 2019.

Answer to Problem 61BPSB

Events	Accounts and Explanation	Debit	Credit
a.	Cash	$45,000
	Common Stock		$45,000

b.	Equipment	18,710
	Cash		18,710

c.	Cash	112,880
	Service Revenue		112,880

d.	Wages Expense	87,300
	Cash		87,300

e.	Cash	20,000
	Notes Payable		20,000

f.	Rent Expense	10,200
	Cash		10,200

g.	Supplies
	Accounts Payable	2,120
			2,120

h.	Accounts Payable	1,200
	Cash		1,200

i.	Utilities Expense	3,250
	Cash		3,250

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase (Cash)		Increase (Common Stock)
b.	Increase (Equipment)
	Decrease (Cash)
c.	Increase (Cash)		Increase (Service Revenue)
d.	Decrease (Cash)		Decrease (Wages Expense)
e.	Increase (Cash)	Increase (Notes Payable)
f.	Decrease (Cash)		Decrease (Rent Expense)
g.	Increase (Supplies)	Increase (Accounts Payable)
h.	Decrease (Cash)	Decrease (Accounts Payable)
i.	Decrease (Cash)		Decrease (Utilities Expense)

Expert Solution

To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 3

Prepare:

Posting the journal entries to T-accounts.

Answer to Problem 61BPSB

Accounts	Balance
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable	920
Notes Payable	20,000
Common Stock	45,000
Service Revenue	112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300

Explanation of Solution

Cash

a. 45,000 c. 112,880 e. 20,000	b. 18,710 d. 87,300 f. 10,200 h. 1,200 i. 3,250
Bal. 57,220

Supplies

g. 2,120
Bal. 2,120

Equipment

b. 18,710
Bal. 18,710

Accounts Payable

h. 1,200	g. 2,120
	Bal. 920

Notes Payable

	e. 20,000
	Bal. 20,000

Common Stock

	a. 45,000
	Bal. 45,000

Service Revenue

	c. 112,880
	Bal. 112,880

Rent Expense

f. 10,200
Bal. 10,200

Utilities Expense

i. 3,250

Wages Expense

d. 87,300
Bal. 87,300

Expert Solution

To determine

Trial Balance:

A financial statement which integrates all the balance of ledger accounts is termed as a trial balance. The total balance of debit and credit in trial balance should be equal at end of an accounting period.

Requirement 3

Prepare:

Prepare the trial balance as of December 31, 2019.

Answer to Problem 61BPSB

The total balance of the trial balance for the year ending December 31, 2019 is $178,800.

Explanation of Solution

Sweetwater Temporary Clerical Help ServiceTrial Balance December 31, 2019
Accounts	Debit	Credit
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable		$920
Notes Payable		20,000
Common Stock		45,000
Service Revenue		112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300
Total	$178,800	$178,800

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Answer 4

Textbook Question

Chapter 2, Problem 61BPSB

Problem 2-6B The Accounting Cycle

Sweetwater Temporary Clerical Help Service opened for business in June 2019. From the opening until the end of the year. Sweetwater engaged in the activities described below. So that a realistic trial balance can be prepared, the events described below are aggregations of many individual events.

Sold 10,000 shares of common stock for $4.50 per share.
Purchased office equipment from Furniture Max Inc. for $18,110 cash.
Received $112,880 from clients for services provided.
Paid wages $87,300.
Borrowed $20,000 from the Bank of America on a 3-year note payable.
Paid office rent of $10,200
Purchased office supplies on credit for $2,120 from Office Supply Inc.
Paid $1,200 toward the payable established in Transaction g.
Paid utility charges incurred during the year of $3,250.

Required:

1. Analyze the events for their effect on the accounting equation.

2. Prepare journal entries. (Note: Ignore the date because these events are aggregations of individual events)

3. Post the journal entries to T-accounts.

4. Prepare a trial balance at December 31, 2019.

Expert Solution

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Requirement 1

Determine:

Analyze the events for their effect on the accounting equation.

Answer to Problem 61BPSB

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	$45,000		$45,000
b.	18,710
	(18,710)
c.	112,880		112,880
d.	(87,300)		(87,300)
e.	20,000	20,000
f.	(10,200)		(10,200)
g.	2,120	2,120
h.	(1,200)	(1,200)
i.	(3,250)		(3,250)

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase		Increase
b.	Increase
	Decrease
c.	Increase		Increase
d.	Decrease		Decrease
e.	Increase	Increase
f.	Decrease		Decrease
g.	Increase	Increase
h.	Decrease	Decrease
i.	Decrease		Decrease

Expert Solution

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement 2

To Prepare:

Prepare journal entries for the transaction during 2019.

Answer to Problem 61BPSB

Events	Accounts and Explanation	Debit	Credit
a.	Cash	$45,000
	Common Stock		$45,000

b.	Equipment	18,710
	Cash		18,710

c.	Cash	112,880
	Service Revenue		112,880

d.	Wages Expense	87,300
	Cash		87,300

e.	Cash	20,000
	Notes Payable		20,000

f.	Rent Expense	10,200
	Cash		10,200

g.	Supplies
	Accounts Payable	2,120
			2,120

h.	Accounts Payable	1,200
	Cash		1,200

i.	Utilities Expense	3,250
	Cash		3,250

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase (Cash)		Increase (Common Stock)
b.	Increase (Equipment)
	Decrease (Cash)
c.	Increase (Cash)		Increase (Service Revenue)
d.	Decrease (Cash)		Decrease (Wages Expense)
e.	Increase (Cash)	Increase (Notes Payable)
f.	Decrease (Cash)		Decrease (Rent Expense)
g.	Increase (Supplies)	Increase (Accounts Payable)
h.	Decrease (Cash)	Decrease (Accounts Payable)
i.	Decrease (Cash)		Decrease (Utilities Expense)

Expert Solution

To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 3

Prepare:

Posting the journal entries to T-accounts.

Answer to Problem 61BPSB

Accounts	Balance
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable	920
Notes Payable	20,000
Common Stock	45,000
Service Revenue	112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300

Explanation of Solution

Cash

a. 45,000 c. 112,880 e. 20,000	b. 18,710 d. 87,300 f. 10,200 h. 1,200 i. 3,250
Bal. 57,220

Supplies

g. 2,120
Bal. 2,120

Equipment

b. 18,710
Bal. 18,710

Accounts Payable

h. 1,200	g. 2,120
	Bal. 920

Notes Payable

	e. 20,000
	Bal. 20,000

Common Stock

	a. 45,000
	Bal. 45,000

Service Revenue

	c. 112,880
	Bal. 112,880

Rent Expense

f. 10,200
Bal. 10,200

Utilities Expense

i. 3,250

Wages Expense

d. 87,300
Bal. 87,300

Expert Solution

To determine

Trial Balance:

A financial statement which integrates all the balance of ledger accounts is termed as a trial balance. The total balance of debit and credit in trial balance should be equal at end of an accounting period.

Requirement 3

Prepare:

Prepare the trial balance as of December 31, 2019.

Answer to Problem 61BPSB

The total balance of the trial balance for the year ending December 31, 2019 is $178,800.

Explanation of Solution

Sweetwater Temporary Clerical Help ServiceTrial Balance December 31, 2019
Accounts	Debit	Credit
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable		$920
Notes Payable		20,000
Common Stock		45,000
Service Revenue		112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300
Total	$178,800	$178,800

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Requirement 1

Determine:

Analyze the events for their effect on the accounting equation.

Answer to Problem 61BPSB

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	$45,000		$45,000
b.	18,710
	(18,710)
c.	112,880		112,880
d.	(87,300)		(87,300)
e.	20,000	20,000
f.	(10,200)		(10,200)
g.	2,120	2,120
h.	(1,200)	(1,200)
i.	(3,250)		(3,250)

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase		Increase
b.	Increase
	Decrease
c.	Increase		Increase
d.	Decrease		Decrease
e.	Increase	Increase
f.	Decrease		Decrease
g.	Increase	Increase
h.	Decrease	Decrease
i.	Decrease		Decrease

Expert Solution

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement 2

To Prepare:

Prepare journal entries for the transaction during 2019.

Answer to Problem 61BPSB

Events	Accounts and Explanation	Debit	Credit
a.	Cash	$45,000
	Common Stock		$45,000

b.	Equipment	18,710
	Cash		18,710

c.	Cash	112,880
	Service Revenue		112,880

d.	Wages Expense	87,300
	Cash		87,300

e.	Cash	20,000
	Notes Payable		20,000

f.	Rent Expense	10,200
	Cash		10,200

g.	Supplies
	Accounts Payable	2,120
			2,120

h.	Accounts Payable	1,200
	Cash		1,200

i.	Utilities Expense	3,250
	Cash		3,250

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase (Cash)		Increase (Common Stock)
b.	Increase (Equipment)
	Decrease (Cash)
c.	Increase (Cash)		Increase (Service Revenue)
d.	Decrease (Cash)		Decrease (Wages Expense)
e.	Increase (Cash)	Increase (Notes Payable)
f.	Decrease (Cash)		Decrease (Rent Expense)
g.	Increase (Supplies)	Increase (Accounts Payable)
h.	Decrease (Cash)	Decrease (Accounts Payable)
i.	Decrease (Cash)		Decrease (Utilities Expense)

Expert Solution

To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 3

Prepare:

Posting the journal entries to T-accounts.

Answer to Problem 61BPSB

Accounts	Balance
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable	920
Notes Payable	20,000
Common Stock	45,000
Service Revenue	112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300

Explanation of Solution

Cash

a. 45,000 c. 112,880 e. 20,000	b. 18,710 d. 87,300 f. 10,200 h. 1,200 i. 3,250
Bal. 57,220

Supplies

g. 2,120
Bal. 2,120

Equipment

b. 18,710
Bal. 18,710

Accounts Payable

h. 1,200	g. 2,120
	Bal. 920

Notes Payable

	e. 20,000
	Bal. 20,000

Common Stock

	a. 45,000
	Bal. 45,000

Service Revenue

	c. 112,880
	Bal. 112,880

Rent Expense

f. 10,200
Bal. 10,200

Utilities Expense

i. 3,250

Wages Expense

d. 87,300
Bal. 87,300

Expert Solution

To determine

Trial Balance:

A financial statement which integrates all the balance of ledger accounts is termed as a trial balance. The total balance of debit and credit in trial balance should be equal at end of an accounting period.

Requirement 3

Prepare:

Prepare the trial balance as of December 31, 2019.

Answer to Problem 61BPSB

The total balance of the trial balance for the year ending December 31, 2019 is $178,800.

Explanation of Solution

Sweetwater Temporary Clerical Help ServiceTrial Balance December 31, 2019
Accounts	Debit	Credit
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable		$920
Notes Payable		20,000
Common Stock		45,000
Service Revenue		112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300
Total	$178,800	$178,800

Answer 8

Expert Solution

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Requirement 1

Determine:

Analyze the events for their effect on the accounting equation.

Answer to Problem 61BPSB

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	$45,000		$45,000
b.	18,710
	(18,710)
c.	112,880		112,880
d.	(87,300)		(87,300)
e.	20,000	20,000
f.	(10,200)		(10,200)
g.	2,120	2,120
h.	(1,200)	(1,200)
i.	(3,250)		(3,250)

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase		Increase
b.	Increase
	Decrease
c.	Increase		Increase
d.	Decrease		Decrease
e.	Increase	Increase
f.	Decrease		Decrease
g.	Increase	Increase
h.	Decrease	Decrease
i.	Decrease		Decrease

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Requirement 1

Determine:

Analyze the events for their effect on the accounting equation.

Answer 13

Answer to Problem 61BPSB

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	$45,000		$45,000
b.	18,710
	(18,710)
c.	112,880		112,880
d.	(87,300)		(87,300)
e.	20,000	20,000
f.	(10,200)		(10,200)
g.	2,120	2,120
h.	(1,200)	(1,200)
i.	(3,250)		(3,250)

Answer 14

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase		Increase
b.	Increase
	Decrease
c.	Increase		Increase
d.	Decrease		Decrease
e.	Increase	Increase
f.	Decrease		Decrease
g.	Increase	Increase
h.	Decrease	Decrease
i.	Decrease		Decrease

Answer 15

Expert Solution

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement 2

To Prepare:

Prepare journal entries for the transaction during 2019.

Answer to Problem 61BPSB

Events	Accounts and Explanation	Debit	Credit
a.	Cash	$45,000
	Common Stock		$45,000

b.	Equipment	18,710
	Cash		18,710

c.	Cash	112,880
	Service Revenue		112,880

d.	Wages Expense	87,300
	Cash		87,300

e.	Cash	20,000
	Notes Payable		20,000

f.	Rent Expense	10,200
	Cash		10,200

g.	Supplies
	Accounts Payable	2,120
			2,120

h.	Accounts Payable	1,200
	Cash		1,200

i.	Utilities Expense	3,250
	Cash		3,250

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase (Cash)		Increase (Common Stock)
b.	Increase (Equipment)
	Decrease (Cash)
c.	Increase (Cash)		Increase (Service Revenue)
d.	Decrease (Cash)		Decrease (Wages Expense)
e.	Increase (Cash)	Increase (Notes Payable)
f.	Decrease (Cash)		Decrease (Rent Expense)
g.	Increase (Supplies)	Increase (Accounts Payable)
h.	Decrease (Cash)	Decrease (Accounts Payable)
i.	Decrease (Cash)		Decrease (Utilities Expense)

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement 2

To Prepare:

Prepare journal entries for the transaction during 2019.

Answer 20

Answer to Problem 61BPSB

Events	Accounts and Explanation	Debit	Credit
a.	Cash	$45,000
	Common Stock		$45,000

b.	Equipment	18,710
	Cash		18,710

c.	Cash	112,880
	Service Revenue		112,880

d.	Wages Expense	87,300
	Cash		87,300

e.	Cash	20,000
	Notes Payable		20,000

f.	Rent Expense	10,200
	Cash		10,200

g.	Supplies
	Accounts Payable	2,120
			2,120

h.	Accounts Payable	1,200
	Cash		1,200

i.	Utilities Expense	3,250
	Cash		3,250

Answer 21

Explanation of Solution

Accounting Equation
Asset = Liabilities + Stockholders’ Equity
a.	Increase (Cash)		Increase (Common Stock)
b.	Increase (Equipment)
	Decrease (Cash)
c.	Increase (Cash)		Increase (Service Revenue)
d.	Decrease (Cash)		Decrease (Wages Expense)
e.	Increase (Cash)	Increase (Notes Payable)
f.	Decrease (Cash)		Decrease (Rent Expense)
g.	Increase (Supplies)	Increase (Accounts Payable)
h.	Decrease (Cash)	Decrease (Accounts Payable)
i.	Decrease (Cash)		Decrease (Utilities Expense)

Answer 22

Expert Solution

To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 3

Prepare:

Posting the journal entries to T-accounts.

Answer to Problem 61BPSB

Accounts	Balance
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable	920
Notes Payable	20,000
Common Stock	45,000
Service Revenue	112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300

Explanation of Solution

Cash

a. 45,000 c. 112,880 e. 20,000	b. 18,710 d. 87,300 f. 10,200 h. 1,200 i. 3,250
Bal. 57,220

Supplies

g. 2,120
Bal. 2,120

Equipment

b. 18,710
Bal. 18,710

Accounts Payable

h. 1,200	g. 2,120
	Bal. 920

Notes Payable

	e. 20,000
	Bal. 20,000

Common Stock

	a. 45,000
	Bal. 45,000

Service Revenue

	c. 112,880
	Bal. 112,880

Rent Expense

f. 10,200
Bal. 10,200

Utilities Expense

i. 3,250

Wages Expense

d. 87,300
Bal. 87,300

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 3

Prepare:

Posting the journal entries to T-accounts.

Answer 27

Answer to Problem 61BPSB

Accounts	Balance
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable	920
Notes Payable	20,000
Common Stock	45,000
Service Revenue	112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300

Answer 28

Explanation of Solution

Cash

a. 45,000 c. 112,880 e. 20,000	b. 18,710 d. 87,300 f. 10,200 h. 1,200 i. 3,250
Bal. 57,220

Supplies

g. 2,120
Bal. 2,120

Equipment

b. 18,710
Bal. 18,710

Accounts Payable

h. 1,200	g. 2,120
	Bal. 920

Notes Payable

	e. 20,000
	Bal. 20,000

Common Stock

	a. 45,000
	Bal. 45,000

Service Revenue

	c. 112,880
	Bal. 112,880

Rent Expense

f. 10,200
Bal. 10,200

Utilities Expense

i. 3,250

Wages Expense

d. 87,300
Bal. 87,300

Answer 29

Expert Solution

To determine

Trial Balance:

A financial statement which integrates all the balance of ledger accounts is termed as a trial balance. The total balance of debit and credit in trial balance should be equal at end of an accounting period.

Requirement 3

Prepare:

Prepare the trial balance as of December 31, 2019.

Answer to Problem 61BPSB

The total balance of the trial balance for the year ending December 31, 2019 is $178,800.

Explanation of Solution

Sweetwater Temporary Clerical Help ServiceTrial Balance December 31, 2019
Accounts	Debit	Credit
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable		$920
Notes Payable		20,000
Common Stock		45,000
Service Revenue		112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300
Total	$178,800	$178,800

Answer 30

Expert Solution

Answer 31

Expert Solution

Answer 32

Expert Solution

Answer 33

To determine

Trial Balance:

A financial statement which integrates all the balance of ledger accounts is termed as a trial balance. The total balance of debit and credit in trial balance should be equal at end of an accounting period.

Requirement 3

Prepare:

Prepare the trial balance as of December 31, 2019.

Answer 34

Answer to Problem 61BPSB

The total balance of the trial balance for the year ending December 31, 2019 is $178,800.

Answer 35

Explanation of Solution

Sweetwater Temporary Clerical Help ServiceTrial Balance December 31, 2019
Accounts	Debit	Credit
Cash	$57,220
Supplies	2,120
Equipment	18,710
Accounts Payable		$920
Notes Payable		20,000
Common Stock		45,000
Service Revenue		112,880
Rent Expense	10,200
Utilities Expense	3,250
Wages Expense	87,300
Total	$178,800	$178,800