Question

Mastery Problem: Analyzing Transactions

KL Company Inc.

In February, Katie Long formed KL Company Inc. Transactions for the month of March have been posted to the T accounts. An intern has prepared a trial balance from the T accounts, but there seem to be some errors.

T accounts

Cash
Bal.	8,000	3/3	2,300
3/25	7,425	3/27	1,225
3/28	7,000	3/29	3,425
3/30	7,975	3/31	1,875

Accounts Receivable
Bal.	1,950
3/18	9,725	3/30	7,975

Supplies
Bal.	225
3/7	1,700

Office Equipment
3/2	16,500

Accounts Payable
3/27	1,225	Bal.	1,250
		3/7	1,700

Notes Payable
		3/2	16,500

Common Stock
		Bal.	7,500
		3/28	7,000

Retained Earnings
		Bal.	1,425

Dividends
3/31	1,875

Fees Earned
		3/18	9,725
		3/25	7,425

Rent Expense
3/3	2,300

Wages Expense
3/29	3,425

Required:

Transactions

Descriptions of the transactions for the month of March are provided in the following table. Each of the transactions that follow has been posted to the T accounts. Referring to the T accounts, select the date on which each transaction occurred, enter the amount of the transaction, and select the account to debit and credit.

Transaction	Date	Amount	Debit	Credit
Purchased equipment, giving a note payable for the purchase price.	3/2	$
Paid rent for April.		$
Purchased supplies on account.		$
Recorded fees earned on account.		$
Received cash for fees earned.		$
Paid creditors on account.		$
KL Company Inc. issued additional shares of common stock in exchange for cash.		$
Paid wages.		$
Received cash from customers on account.		$
KL Company Inc. paid dividends to its stockholders.		$

Answer 1

Working as follows:

Transaction	Date	Amount	Debit	Credit
Purchased equipment, giving a note payable for the purchase price.	3/2	$16,500	Office Equipment	Notes payable
Paid rent for April.	3/3	$2,300	Rent Expense	Cash
Purchased supplies on account.	3/7	$1,700	Supplies	Accounts payable
Recorded fees earned on account.	3/18	$9,725	Accounts Receivable	Fees Earned
Received cash for fees earned.	3/25	$7,425	Cash	Fees Earned
Paid creditors on account.	3/27	$1,225	Accounts payable	Cash
KL Company Inc. issued additional shares of common stock in exchange for cash.	3/28	$7,000	Cash	Common stock
Paid wages.	3/29	$3,425	Wages Expense	Cash
Received cash from customers on account.	3/30	$7,975	Cash	Accounts Receivable
KL Company Inc. paid dividends to its stockholders.	3/31	$1,875	Dividends	Cash

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