The accountant for the firm owned by Randy Guttery prepares financial statements

Question

The accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019. The following transactions are for Randy Guttery, Landscape Consultant.

Transactions:

Guttery invested $80,000 in cash to start the business.

Paid $3,000 for the current month’s rent.

Bought office furniture for $8,360 in cash.

Performed services for $4,100 in cash.

Paid $625 for the monthly telephone bill.

Performed services for $7,000 on credit.

Purchased a computer and copier for $19,000; paid $6,500 in cash immediately with the balance due in 30 days.

Received $3,500 from credit clients.

Paid $2,000 in cash for office cleaning services for the month.

Purchased additional office chairs for $2,900; received credit terms of 30 days.

Purchased office equipment for $20,000 and paid half of this amount in cash immediately; the balance is due in 30 days.

Issued a check for $4,700 to pay salaries.

Performed services for $7,250 in cash.

Performed services for $8,000 on credit.

Collected $4,000 on accounts receivable from charge customers.

Issued a check for $1,450 in partial payment of the amount owed for office chairs.

Paid $350 to a duplicating company for photocopy work performed during the month.

Paid $610 for the monthly electric bill.

Guttery withdrew $4,500 in cash for personal expenses.

Post the above transactions into the appropriate T accounts.

Analyze:
What liabilities does the business have after all transactions have been recorded? T accounts normally do not have any minus signs. Use minus signs in this problem to demonstrate your understanding of decreases to account balances.

This is a numeric cell, so please enter numbers only.

Explanation / Answer

Liabilities will be 23950 in the form of Accounts Payable.

Cash Accounts Receivable Debit Credit Debit Credit 1 80000 3000 2 -1 6 7000 3500 8 4 4100 8360 3 14 8000 4000 15 8 3500 625 5 Balance 7500 13 7250 6500 7 15000 15000 15 4000 2000 9 10000 11 4700 12 1450 16 350 17 610 18 4500 19 Balance 56755 98850 98850 Office Equipment Office Furniture Debit Credit Debit Credit 7 19000 3 8360 11 20000 10 2900 Balance 39000 Balance 11260 39000 39000 11260 11260 Accounts Payable Randy Guttery , Capital Debit Credit Debit Credit 16 1450 12500 7 80000 1 2900 10 10000 11 Balance 23950 Balance 80000 25400 25400 80000 80000 Randy Guttery , Drawing Fees Income Debit Credit Debit Credit 19 4500 4100 4 7000 6 7250 13 Balance 4500 8000 14 4500 4500 Balance 26350 26350 26350 Rent Expense Utility Expense Debit Credit Debit Credit 2 3000 18 610 Balance 3000 Balance 610 3000 3000 610 610 Salaries Expense Telephone Expense Debit Credit Debit Credit 12 4700 5 625 Balance 4700 Balance 625 4700 4700 625 625 Miscelleneous Expense Debit Credit 9 2000 17 350 Balance 2350 2350 2350

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