Question

Question

Transactions for ABC Company for the month of September are presented below.

Sept.1 The company issued common stock in exchange for $300,000 cash.

4. Purchased equipment for $40,000, paying $6,000 in cash and the remainder on credit.

10. Paid $2,000 for a one-year insurance policy.
11. Purchased office supplies on account for $1,600.

15. Performed services for a customer on account for $5,000 and the customer                           promises to pay within this month.

17. Performed services for a customer and received cash of $6,000.

25. Paid for the office supplies previously purchased on account.

27. Paid salaries to employees $3,000 and utilities $2,000.
28. Received $3,000 for services previously performed on account.

30. Paid $4,400 cash for dividends.

Instructions: Read each of the above transactions, then: Journalize each transaction (you may omit journal explanations) (1 point each 22*1) Open T account for Cash and post the journal entries to Cash account ONLY, then compute its balance at the end of September (3.0 marks).

Answer 1

Date	Account titles	Debit	Credit
Sept 1	Cash	300,000
	Common Stock		300,000
Sept 4	Equipment	40,000
	Cash		6000
	Accounts payable		34000
Sept 10	Prepaid insurance	2000
	Cash		2000
Sept 11	Office supplies	1600
	Accounts payable		1600
Sept 15	Accounts receivable	5000
	Service revenue		5000
Sept 17	Cash	6000
	Service revenue		6000
Sept 25	Accounts payable	1600
	Cash		1600
Sept 27	Salaries expense	3000
	Utilities	2000
	Cash		5000
Sept 28	Cash	3000
	Accounts receivable		3000
Sept 30	Cash dividends	4400
	Cash		4400

	Cash a/c
Sept 1	300,000	Sept 4	6000
Sept 17	6000	Sept 10	2000
Sept 28	3000	Sept 25	1600
		Sept 27	5000
		Sept 30	4400
Bal	290,000