Question

Summary financial data of the Vinegar Cleaning Co. for December are presented below in transaction form.

1. Began operations by depositing $52.000 in a business bank account.
2. Cash income received for cleaning services, $500.
3. Paid salaries for the month, $10,200.
4. Paid general expenses, $600.
5. Paid $1.000 on account.
6. The inventory of supplies on hand at the end of the month was $50.

Form a table and workout the question by using the following accounts; cash, supplies, equipment, accounts payable, capital and retained earnings.

Answer 1

Following is the Journal Entry Table below of Vinegar Cleaning Co. for the month of December : -

1) Bank A/c Dr. $52000

To Capital A/c $52000

(Being capital introduced in business)

2.) Cash A/c Dr. $500

To Income A/c $500

(Being cleaning services income accrued)

4.) Income A/c Dr. $500

To Capital A/c $500

(Being income transferred into capital Account)

5.) Salaries A/c Dr. $10200

To Bank A/c $10200

(Being salaries paid for the month)

6.) Capital A/c Dr. $10200

To Salaries A/c $10200

(Being salaries transferred to capital account)

7.) General Expenses A./c Dr. $600

To Bank A/c $600

(Being general expenses incurred)

8.) Capital A/c Dr. $600

To General Expenses A/c $600

9.) Bank A/c Dr.    $1000

To Cash A/c $1000

(Being cash deposited in bank)

Note1 - Assuming "Paid $1 on account" means cash deposited in bank account.

Note2: - Inventory of supplies on hand at the end of the month was $50.