Question

INSTRUCTIONS: THE OWNER IS IVETTE MARTINEZ AND IS DEDICATED TO GIVING BUSINESS CONSULTATIONS. THE BUSINESS STARTED IN THE MONTH OF OCTOBER OF THE CURRENT YEAR.

1. ANALYZE THE FOLLOWING TRANSACTIONS IN THE TABLE OF THE SIMPLE EQUATION.

2. PREPARE THE TRANSACTIONS IN A JOURNAL.

3. TRANSFER THE TRANSACTIONS TO THE RELEVANT T ACCOUNTS.

4. PREPARE THE TRIAL BALANCE OF THE COMPANY CALLED FREE CONSULTATIONS.

TRANSACTIONS:

1. MARTINEZ INVESTED $60,000 IN HER COMPANY.

2. MADE A LOAN TO BANCO SANTANDER FOR $10,000.

3. PAID $150 FOR THE ELECTRICITY BILL OF THE COMPANY.

4. PAID $500 THE MONTH OF OCTOBER OF THE BANK LOAN

5. GAVE $2,500 FOR SERVICES ON ACCOUNT TO THE CLIENTE MARIA VEGA.

6. PURCHASED A COMPUTER FROM WALMART FOR THE TOTAL OF $2,500 ON ACCOUNT.

7. MARTINEZ WITHDREW $500 FOR PERSONAL USE.

8. RECEIVED $1,500 FOR SERVICES GIVEN.

9. PAID $100 FOR AN ADVERTISEMENT OF THE COMPANY.

10. RECEIVED $500 FROM MARIA VEGA AS A PAYMENT FOR HER ACCOUNT.

CHART OF ACCOUNTS

CASH 1001

ACCOUNTS RECEIVABLE 1002

OFFICE EQUIPMENT 1003

ACCOUNTS PAYABLE 2001

NOTES PAYABLE 2002

MARTINEZ CAPITAL 3001

MARTINEZ DRAWINGS 3002

SERVICE REVENUE 4001

UTILITIES EXPENSE 5001

ADVERTISING EXPENSE 5002

Answer 1

1.

Accounting Equation:

Transaction	Assets	=	Liabilities	+	Owner's Equity
		=		+
1	$ 60,000	=		+	$              60,000
2	$ 10,000	=	$ 10,000	+
3	$      -150	=		+	$                   -150
4	$      -500	=	$      -500	+
5	$    2,500	=		+	$                 2,500
6	$    2,500	=	$    2,500	+
7	$      -500	=		+	$                   -500
8	$    1,500	=		+	$                 1,500
9	$      -100	=		+	$                   -100
10	$           -	=		+

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2.JOURNAL

Date	Account Title	Debit	Credit
OCTOBER
1	CASH	$              60,000
	MARTINEZ CAPITAL		$               60,000
	(Contribution by Owner)
2	CASH	$              10,000
	NOTES PAYABLE		$               10,000
	(Loan Taken)
3	UTILITIES EXPENSE	$                    150
	CASH		$                     150
	(Expense Paid)
4	NOTES PAYABLE	$                    500
	CASH		$                     500
	(Monthly Repayment of Loan)
5	ACCOUNTS RECEIVABLE	$                 2,500
	SERVICE REVENUE		$                  2,500
	(Service rendered on account)
6	OFFICE EQUIPMENT	$                 2,500
	ACCOUNTS PAYABLE		$                  2,500
	(Computer bought)
7	MARTINEZ DRAWINGS	$                    500
	CASH		$                     500
	(Cash Withdrawn by owner)
8	CASH	$                 1,500
	SERVICE REVENUE		$                  1,500
	(Service rendered for cash)
9	ADVERTISING EXPENSE	$                    100
	CASH		$                     100
	(Expense Paid)
10	CASH	$                    500
	ACCOUNTS RECEIVABLE		$                     500
	(Cash received from client)

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3.T ACCOUNTS.

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4.TRIAL BALANCE

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