Question

The following transactions occur in November.
November 1 Issue common stock in exchange for $11,800 cash.
November 2 Purchase equipment with a long-term note for $2,300 from Spartan Corporation.
November 4 Purchase supplies for $1,200 on account.
November 10 Provide services to customers on account for $7,800.
November 15 Pay creditors on account, $1,000.
November 20 Pay employees $1,800 for the first half of the month.
November 22 Provide services to customers for $9,800 cash.
November 24 Pay $920 on the note from Spartan Corporation.
November 26 Collect $5,800 on account from customers.
November 28 Pay $1,000 to the local utility company for November gas and electricity.
November 30 Pay $3,800 rent for November.
Required:
1. Record each transaction.
2. Post each transaction to appropriate t-account.

Answer 1

Answer:

Required 1.

November 1

Cash $11,800 (debit)

Common Shares $11,800 (credit)

November 2

Equipment $2,300 (debit)

Note Payable $2,300 (credit)

November 4

Supplies $1,200 (debit)

Trade Payable $1,200 (credit)

November 10

Trade Receivable  $7,800 (debit)

Revenue  $7,800 (credit)

November 15

Trade Payable $1,000 (debit)

Cash $1,000 (credit)

November 20

Salaries and Wages  $1,800 (debit)

Cash  $1,800 (credit)

November 22

Cash $9,800 (debit)

Revenue $9,800 (credit)

November 24

Note Payable $920 (debit)

Cash $920 (credit)

November 26

Cash $5,800 (debit)

Trade Receivable $5,800 (credit)

November 28

Utilities $1,000 (debit)

Cash $1,000 (credit)

November 30

Rent $3,800 (debit)

Cash $3,800 (credit)

Required 2.

T - Account Balances

Cash  = $18,800 (debit)

Common Shares = $11,800 (credit)

Equipment = $2,300 (debit)

Note Payable  = $1,380 (credit)

Supplies = $1,200 (debit)

Trade Payable  = $200 (credit)

Trade Receivable   = $2,000 (debit)

Revenue  = $17,600 (credit)

Salaries and Wages  = $1,800 (debit)

Utilities = $1,000 (debit)

Rent =  $3,800 (debit)

Explanation:

T - Account Balance Calculations :

Cash = $11,800 - $1,000 - $1,800 + $9,800 - $920 + $5,800 - $1,000 - $3,800 = $18,800 (debit)

Common Shares = $11,800 (credit)

Equipment = $2,300 (debit)

Note Payable $2,300 - $920 = $1,380 (credit)

Supplies = $1,200 (debit)

Trade Payable $1,200 - $1,000 = $200 (credit)

Trade Receivable  $7,800 - $5,800 = $2,000 (debit)

Revenue  $7,800 + $9,800 = $17,600 (credit)

Salaries and Wages  = $1,800 (debit)

Utilities = $1,000 (debit)

Rent =  $3,800 (debit)