Chapter 3, Problem 7SEB

ANALYSIS OF TRANSACTIONS Nicole Lawrence opened a business called Nickie’s Neat Ideas in January 20--. Set up T accounts for the following accounts: Cash; Accounts Receivable; Office Supplies; Computer Equipment; Office Furniture; Accounts Payable; Nicole Lawrence, Capital; Nicole Lawrence, Drawing; Professional Fees; Rent Expense; and Utilities Expense.

The following transactions occurred during the first month of business. Record these transactions in T accounts. After all transactions have been recorded, foot and balance the accounts if necessary.

1. (a) Invested cash in the business, $18,000.
2. (b) Purchased office supplies for cash, $500.
3. (c) Purchased office furniture for cash, $8,000.
4. (d) Purchased computer and printer on account, $5,000.
5. (e) Received cash from clients for services, $4,000.
6. (f) Paid cash on account for computer and printer purchased in transaction (d), $2,000.
7. (g) Earned professional fees on account during the month, $7,000.
8. (h) Paid office rent for January, $900.
9. (i) Paid utility bills for the month, $600.
10. (j) Received cash from clients that were billed previously in transaction (g), $3,000.
11. (k) Withdrew cash for personal use, $4,000.