The Accounting Cycle: Nov. 1: Luis Rulz invests $20,000 to start his own consult

Question

The Accounting Cycle: Nov. 1: Luis Rulz invests $20,000 to start his own consulting Nov. 1: Purchased a one-year fire insurance policy. $960. a computer for $10,00, paying $3 500 down w baedu in o dayn. Nov. 6: Purchased office supplies on account from Taylor Nov.9: Paid Taylor Supply $400 on account. Nov. 10: Billed Barkley Insurance for consulting services performed, $6,000. Nov. 12: Collected $1,500 from Barkley Insurance. Nov. 12: Hired secretary to be paid $600 per week. Nov. 15: Collected $1,000 from Bryant Realty for consulting services to be performed. Nov. 26: Paid the secretary two weeks' wages, $1,200. Nov. 29: Received and paid the November utility bill, $700. Nov. 30: Received (but did not pay) the November telephone bill, $10o. Supply, $1,500 Nov. 30: Performed consulting services for Bing Enterprises, $4,800, to be collected in December. Nov. 30: Ruiz withdrew $1,400 from the business for personal living expenses.

Explanation / Answer

cash a/c

to capital

( being amount invested in business)

insurance a/c

to cash

( being amount paid for insurance policy)

computer a/c

to cash

to creditors of computers

( being computer purchased for cash and balance due in 60 days )

3500

6500

office supplies a/c

to taylor

( being office supplies purchased from taylor on account)

taylor a/c

to cash

( being cash payment made to taylor)

barkley insurance a/c

to sales

being services given to barkley insurance)

cash a/c

to barkley insurance

( being amount collected from barkley insurance)

cash a/c

to bryant realty

( being advance received from bryant realty)

wages a/c

to cash

( being secretary two weeks wages paid in cash)

bill expenses a/c

to cash

being expenses made in cash

telephone expenses a/c

to telephone bill outstanding

being amount outstanding for telephone bill expenses

bing enterprises a/c

to sales

being services performed for bing enterprises

drawings a/c

to cash

being amount withdrew from the business for personal expenses

DATE PARTICULARS DEBIT$ CREDIT$ nov 1

cash a/c

to capital

( being amount invested in business)

20000 20000 nov 1

insurance a/c

to cash

( being amount paid for insurance policy)

960 960 nov 5

computer a/c

to cash

to creditors of computers

( being computer purchased for cash and balance due in 60 days )

10000

3500

6500

nov 6

office supplies a/c

to taylor

( being office supplies purchased from taylor on account)

1500 1500 nov 9

taylor a/c

to cash

( being cash payment made to taylor)

400 400 nov 10

barkley insurance a/c

to sales

being services given to barkley insurance)

6000 6000 nov 12

cash a/c

to barkley insurance

( being amount collected from barkley insurance)

1500 1500 nov 15

cash a/c

to bryant realty

( being advance received from bryant realty)

1000 1000 nov 26

wages a/c

to cash

( being secretary two weeks wages paid in cash)

1200 1200 nov 29

bill expenses a/c

to cash

being expenses made in cash

700 700 nov 30

telephone expenses a/c

to telephone bill outstanding

being amount outstanding for telephone bill expenses

100 100 nov 30

bing enterprises a/c

to sales

being services performed for bing enterprises

4800 4800 nov 30

drawings a/c

to cash

being amount withdrew from the business for personal expenses

1400 1400

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