Page 106 - Accounting Principles (A Business Perspective)

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Aug. 1 Issued capital stock for cash, USD 150,000.
3 Borrowed USD 40,000 from the bank on a note.
4 Purchased cleaning equipment for USD 25,000 cash.

6 Performed services for customers who promised to pay later, USD 16,000.
7 Paid this month's rent on a building, USD 2,800.
10 Collections were made for the services performed on August 6, USD 3,200.
14 Supplies were purchased on account for use this month, USD 3,000.
17 A bill for USD 400 was received for utilities for this month.
25 Laundry services were performed for customers who paid immediately, USD 22,000.
31 Paid employee salaries, USD 6,000.

31 Paid cash dividend, USD 2,000.
a. Prepare journal entries for these transactions.
b. Post the journal entries to T-accounts. Enter the account number in the Posting Reference column of the
journal as you post each amount. Use the following account numbers:
Acct.
No. Account Title
100 Cash
103 Accounts receivable
170 Equipment
200 Accounts payable
201 Notes payable
300 Capital stock
320 Dividends
400 Service revenue
507 Salaries expense
511 Utilities expense
515 Rent expense
518 Supplies expense
c. Prepare a trial balance as of 2010 August 31.
Problem C Clean-Sweep Janitorial, Inc., a company providing janitorial services, was organized 2010 July 1.
The following account numbers and titles constitute the chart of accounts for the company:
Acct.
No. Account Title
100 Cash
103 Accounts receivable
150 Trucks
160 Office equipment
170 Equipment
200 Accounts payable
201 Notes payable
300 Capital stock
310 Retained earnings
320 Dividends
400 Service revenue
506 Gas and oil expense
507 Salaries expense
511 Utilities expense
512 Insurance expense
515 Rent expense
518 Supplies expense
July 1 The company issued USD 600,000 of capital stock for cash.
5 Office space was rented for July, and USD 5,000 was paid for the rental.
8 Desks and chairs were purchased for the office on account, USD 28,800.

Accounting Principles: A Business Perspective 107 A Global Text