tRevenue Investment \" ( Supplies Expense 2. Selected accounts from the ledger o

Question

tRevenue Investment " ( Supplies Expense 2. Selected accounts from the ledger of Garrison following: tccounts from the ledger of Garrison Company appear below. For each account, ndicate the irst columun at the right, indicate the nature of each account, using the following abbreviations: Asset A Liability - L None of the above -N Revenue-R Expense E In the second column, indicate the increase side of each account by inserting Dr.or Cr. (b) Increase Side (1) Supplies (2) Notes Receivable (3) Fees Earned (4) Garrison, Drawing (5) Accounts Payable (6) Salaries Expense (7) Garrison, Capital (8) Accounts Receivable (9) Equipment (10) Notes Payable

Explanation / Answer

2 a. b. Account Type of account Increase Side 1 Supplies A Dr. 2 Notes Receivable A Cr. 3 Fees Earned R Cr. 4 Garrison,Drawing(Equity) N Dr. 5 Accounts Payable L Cr. 6 Salaries Payable L Cr. 7 Garrison,Capital(Equity) N Cr. 8 Accounts Receivable A Dr. 9 Equipment A Dr. 10 Notes Payable L Cr. 3a. Ledger Accounts Cash Debit Credit 1 Clay Potter,Capital 12500 3 Operating Expenses 5500 5 Accounts Receivable 4700 6 Accounts payable 1400 7 Accounts Receivable 3100 8 Clay Potter,Drawing 1500 Ending Balance 11900 Supplies 2 Accounts payable 6250 Operating Expenses 3 Cash 5500 Professional fees 4 Accounts Receivable 7440 Clay Potter,Drawing 8 Cash 1500 Clay Potter,Capital Debit Credit 1 Cash 12500 Accounts payable 2 Supplies 6250 6 Cash 1400 Ending Balance 4850 Accounts Receivable 4 Professional fees 7440 5 Cash 4700 7 Cash 3100 Ending Balance 360 Trial Balance Cash 11900 Accounts Receivable 360 Supplies 6250 Accounts payable 4850 Clay Potter,Capital 12500 Clay Potter,Drawing 1500 Professional fees 7440 Operating Expenses 5500 Total 25150 25150 b. Adjusting Journal Entry Supplies expense 1500 Supplies 1500 Revised Trial Balance Cash 11900 Accounts Receivable 360 Supplies 4750 Accounts payable 4850 Clay Potter,Capital 12500 Clay Potter,Drawing 1500 Professional fees 7440 Operating Expenses 5500 Supplies Expense 1500 Total 25150 25150 c.Income Statement for the month Professional fees 7440 Less: expenses: Operating Expenses 5500 Supplies Expense 1500 7000 Net Income 440 Owner's Equity Clay Potter,Capital 12500 Less: Clay Potter,Drawing -1500 Net Income for the mth. 440 Total Owner's Equity 11440 4 a. Fiscal period ends on Tuesday Salaries expense 17600 Salaries payable 17600 22000/5*4 Fiscal period ends on Wednesday Salaries expense 22000 Salaries payable 22000 22000/5*5 b. 1 Insurance expense 5300 Prepaid Insurance 5300 2 Insurance expense 15300 Prepaid Insurance 15300 (18000-2700) c. Property tax expense 54000 Cash 54000 Prepaid property tax 49200 Property taxes expense 49200 (54000-4800) Property taxes expense for July 4800 d. Depreciation expense 32000 Accumulated depreciation-Equipment 32000

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