Requirement #1: During its first month of operation, the Quick Tax Corporation,

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Requirement #1: During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $40,000, in exchange for 4,000 shares of $10 par value common stock. July 3 Paid the current month's rent, $2,500 July 5 Paid the premium on a 1-year insurance policy, $3,600 July 7 Purchased supplies on account from Little Company, $700. July 10 Paid employee salaries, $2,800 July 14 Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1. Note: Use accounts payable for the balance due. July 15 Received cash for preparing tax returns for the first half of July, $6,500 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for preparing tax returns for the last half of July, $8,250 July 31 Declared and paid cash dividends of $450. Prepare journal entries to record the July transactions in the General Journal below. General Journal Date Description(Account Name) Debit Credit Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Tax Preparation Revenue Prepaid Insurance (117) Rent Expense (511) Supplies (119) Salaries Expense (512) Equipment (144) Insurance Expense (513) Accumulated Depreciation-Equipment (145) Supplies Expense (514) Accounts Payable (212) Depreciation Expense (515) Income Tax Payable (213) Income Tax Expense (516) Common Stock (311) Retained Earnings (312) Dividends (313 Requirement #1: During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $40,000, in exchange for 4,000 shares of $10 par value common stock. July 3 Paid the current month's rent, $2,500 July 5 Paid the premium on a 1-year insurance policy, $3,600 July 7 Purchased supplies on account from Little Company, $700. July 10 Paid employee salaries, $2,800 July 14 Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1. Note: Use accounts payable for the balance due. July 15 Received cash for preparing tax returns for the first half of July, $6,500 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for preparing tax returns for the last half of July, $8,250 July 31 Declared and paid cash dividends of $450. Prepare journal entries to record the July transactions in the General Journal below. General Journal Date Description(Account Name) Debit Credit Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Tax Preparation Revenue Prepaid Insurance (117) Rent Expense (511) Supplies (119) Salaries Expense (512) Equipment (144) Insurance Expense (513) Accumulated Depreciation-Equipment (145) Supplies Expense (514) Accounts Payable (212) Depreciation Expense (515) Income Tax Payable (213) Income Tax Expense (516) Common Stock (311) Retained Earnings (312) Dividends (313

Explanation / Answer

Requirement 2:

Date Particulars Debit($) Credit($) Jul-01 Cash 40000 Common Stock 40000 03-Jul Rent 2500 Cash 2500 05-Jul Insurance Expense 3600 Cash 3600 05-Jul Prepaid Insurance 3300 Insurance Expense 3300 07-Jul Supplies 700 Accounts Payable 700 10-Jul Salary 2800 Cash 2800 14-Jul Equipment 9500 cash 1500 Accounts Payable 8000 15-Jul Cash 6500 Tax Preparation Revenue 6500 19-Jul Accounts Payable 500 Cash 500 31-Jul Dividend 450 Cash 450 31-Jul Cash 8250 Tax Preparation Revenue 8250 31-Jul Depreciation 760 Accumulated Depreciation 760

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