Question 1: The trail balance sheet of Moe\'s Mowing, Inc is dated September 31,

Question

Question 1: The trail balance sheet of Moe's Mowing, Inc is dated September 31, 2014 Assets Liabilities Cash Account Receivable Inventory Total current assts Cars build 6,000 400 2,500 Account Payable Notes 5,000 2,500 8,900 Total Liabilities 7,500 7,500 1500 2500 Shareholder's Equity Common Stocks 6,700 6,200 Retained Ea Total fixed asset 11,500 Total owner's equiry 12,900 Total Liabilities and Shareholder's Equity Total Assets 20,400 20,400 During the month of October, the business incurred the following transactions: 1. Deposited $5,000 cash in the business's bank account. The company received the cash and issued common stocks. 2· The company purchased a car for $1,750 on account. 3. The company purchased office supplies for $400 cash 4. The company provided services to a customer for $1,300 on account 5. The company paid $500 cash toward the car which was purchased in transaction (2) 6· The company received $1,000 in cash for services provided to a new customer. 7. The company paid $100 cash to repair car (expenses). 8. The company paid $450 cash in salary expense. The company received $1,100 cash from customers about the services which provided in transaction (4) 10. The owner purchased a car for his personal usage by $14,000 cash 11. Declared and paid dividends of $600. 12. Collecting 70% of accounts receivable. 13. The company paid 55%of its accounts payable. Required . Record theses business transactions in Journal entry Open T-account in the ledger entry and enter these transactions, then close the T-account . Create the Financial statements (Income statement, Retained earnings statement, and balance sheet)

Explanation / Answer

1) Journal Entries: 1 cash 5000 common stock 5000 2 Car 1750 AP 1750 3 Supplies 400 cash 400 4 AR 1300 Services revenue 1300 5 Car 500 Cash 500 6 Cash 1000 Services revenue 1000 7 Repair expense 100 cash 100 8 Salary expense 450 Cash 450 9 Cash 1100 AR 1100 10 Car 14000 Cash 14000 11 Dividend 600 Cash 600 12 Cash 420 AR 420 13 AP 3713 Cash 3713 2) T-Accounts: Debit entry Amount $ Credit Entry Amount $ Cash a/c ob 6000 3 400 1 5000 5 500 6 1000 7 100 9 1100 8 450 12 420 10 14000 cb 6243 11 600 13 3713 Total 19763 Total 19763 Common Stock a/c ob 6700 cb 11700 1 5000 Car a/c : ob 7500 2 1750 5 500 10 14000 cb 23750 AP a/c : 13 3713 ob 5000 cb 3037 2 1750 supplies a/c : 3 400 AR a/c : ob 400 9 1100 4 1300 12 420 cb 180 Service Revenue a/c: 4 1300 cb 2300 6 1000 Repair exp. a/c : 7 100 Salary exp. a/c : 8 450 Dividend exp. a/c: 11 600 3) Income Statement : Service Revenue $2,300 Less: expenses : supplies 400 repair 100 salaries 450 Total expenses 950 Net Income 1350 Balance Sheet: Assets Amount $ Cash -6243 AR 180 Inventory 2500 Current assets -3563 Cars 23750 building 1500 furniture 2500 Fixed assets 27750 Total Assets 24187 Liabilities and Shareholder's equity: Amount $ AP 3037 NP 2500 Current Liabilities 5537 Shareholder's equity: CS 11700 RE (6200+1350-600) 6950 Total owner's equity 18650 Total Liabiliites & owner's equity $24187

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