Question

Lcda. Román Meléndez maintains an office for legal practice. The account balances

as of June 1 are given below. All are normal balances.

Assets                                                                        Revenue

Cash $ 3,500                                                                     Professional Fees $90,000

Accounts Receivable 25,000

Prepaid Insurance 800                                                Expenses

Mini Van   24,500                                                          Salary Expense 15,000

Furniture and Equipment 6,000                                       Rent Expense 11,000

Liabilities                                                                        Automobile Expense 600

Accounts Payable 2,000                                                  Utilities Expense 700

Owner's Equity                                                              Supplies Expense 24,900

C. Russo, Capital 60,000

C. Russo, Drawing 40,000

The following transactions occurred during June of this year.

a. Lcda. Román Meléndez withdrew cash for personal use, $2,000.

b. Paid employee salaries, $900.

c. Paid rent for the month, $1,300.

d. Billed costumers for given services, $7,000.

e. Received cash from costumers (on account) previously billed, $15,000

f. Paid $1,200 for 2 year’s coverage of insurance.

g. Bought equipment and furniture on account from, $500

h. Received and paid gas and electric bill, $300.

i. Pay bill for automobile expense $300

j. Paid creditors on account, $600.

Instructions

1. Correctly place plus and minus signs under each T account and label the sides of the T accounts

as either debit or credit in the fundamental accounting equation. Record the account

balances as of September 1.

2. Record the September transactions in the T accounts. Key each transaction to the letter

that identifies the transaction.

3. Foot the columns.

4. Prepare a balance sheet as of June 30

Answer 1