Concept explainers
Krittersbegone Inc. was organized on July 1 by a group of technicians to provide termite inspections and treatment to homeowners and small businesses. The following transactions occurred during the first month of business:
July 2: Received contributions of $3,000 from each of the six owners in exchange for shares of stock.
July 3: Paid $1,000 rent for the month of July.
July 5: Purchased flashlights, tools, spray equipment, and ladders for $18,000, with a down payment of $5,000 and the balance due in 30 days.
July 17: Paid a $200 bill for the distribution of door-to-door advertising.
July 28: Paid August rent and July utilities to the landlord in the amounts of $1,000 and $450, respectively.
July 30: Received $8,000 in cash from homeowners for services performed during the month. In addition, billed $7,500 to other customers for services performed during the month. Billings are due in 30 days.
July 30: Paid commissions of $9,500 to the technicians for July.
Required
- Prepare journal entries on the books of Krittersbegone to record the transactions entered into during the month. Ignore depreciation expense.
- Prepare a classified balance sheet dated July 31. From the balance sheet, what
cash inflow and whatcash outflow can you predict in the month of August? Who would be interested in thecash flow information? Why?
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Financial Accounting: The Impact on Decision Makers
- Halle's Berry Farm establishes a $350 petty cash fund on September 4 to pay for minor cash expenditures. The fund is replenished at the end of each month. At the end of September, the fund contains $273 in cash. The company has also issued a credit card and authorized its office manager to make purchases. Expenditures for the month include the following items: Entertainment for office party (petty cash) Repairs and maintenance (credit card) Postage (credit card) Delivery cost (credit card) Required: 1. Record the establishment of the petty cash fund on September 4. 2. Record credit card expenditures during the month. The credit card balance is not yet paid. 3. Record petty cash expenditures during the month. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet ere to search F2 2 W 1 S 2 Record the establishment of the petty cash fund on September 4. F3 #m 3 3 E D 100 Et F4 $ 4 F5…arrow_forwardQuality Move Company made the following expenditures on one of its delivery trucks: Mar. 20 Replaced the transmission at a cost of $1,720. June 11 Paid $1,255 for installation of a hydraulic lift. Nov. 30 Paid $55 to change the oil and air filter. Prepare journal entries for each expenditure. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTSQuality Move CompanyGeneral Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner's…arrow_forwardPlease helparrow_forward
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