In: Accounting
T&H Plumbing Company completed the following transactional data for the first month of operations.
May 1: Steven Mattel deposited $68,700 in the business account. In addition, he transferred his vehicle title, worth $13,820, to the business. Steven received capital in return.
1: A Payment was made for the amount of $2,500 to Sky Properties. The concept states “May through July Rent.”
4: Purchased business insurance policy for $2,400 for the period May, 2000, through April 30,2001.
5: Steven went to the Plumbing Tools Distributor and purchased $5,600 on account. This invoice for specialize plumbing tools is due in 30 days.
5: Purchase general plumbing supplies for the amount of $450.
6: Purchased on account plumbing tools from PBS Wholesale costing $1,100. The invoice is payable on May 27.
8: Purchase a computer, $900, and a printer, $79. A check was written for the total amount of $979 under the name Best Buy Company.
8: Purchased office supplies for a total of $450.
9: Plumbing repair was performed for Don Smith Company, $2,800 was sign on account.
10: Deposited $1,000 cash from Don Smith Company in the bank.
11: Bought a pick-up truck for $7,500.00 on account. The first payment of $300 is due on June 15.
15: Paid $500 to Adam Prinkle for contract labor.
15: Signed a contract with Xerox Corporation for the amount of $14,280 for plumbing renovations. The starting date of the contract is May 15, 2000 and the ending date is August 30, 2000. Total amount was received at signature.
16: Provided plumbing services for Letty Petrovsky for $390.
17: Received electric and water bill for the amount of $250. The due date is June 4, 2000.
18: Borrowed $26,000 from bank with interest rate of 9% annually.
19: Deposited check from Don Smith Company for $700 paid on account.
22: Paid $2,000 to Plumbing Tools Distributor for invoice #301450.
22: Wrote check payable to New York Times for $200 for advertising.
25: Bought an office space for the amount of $28,000 on account.
26: Signed a plumbing contract with VP Cathering for the amount of $2,500. The contract is due in 3 months starting on June 1st. Total was received in advance.
30: Mattel withdrew cash of $2,000.
Requirements
JOURNAL ENTRIES
NUMBER | Particulars | Debit $ | Credit $ |
1 | Bank A/c….Dr | $ 68,700 | |
Vehicle A/c….Dr | $ 13,820 | ||
To Owners Capital A/c | $ 82,520 | ||
2 | Rent A/c……Dr | $ 833.33 | |
Prepaid Rent A/c….Dr | $ 1,666.67 | ||
To Bank A/c | $ 2,500 | ||
3 | Insurance Expense A/c…Dr | $ 200 | |
Prepaid Insurance A/c…Dr | $ 2,200 | ||
To Bank A/c | $ 2,400 | ||
4 | Plumbing Tools…..Dr | $ 5,600 | |
To Accounts Payables A/c | $ 5,600 | ||
5 | Plumbing Supplies….Dr | $ 450.00 | |
To Bank A/c | $ 450.00 | ||
6 | Plumbing Tools…..Dr | $ 1,100.00 | |
To Accounts Payables A/c | $ 1,100.00 | ||
7 | Accounts Payables A/c…….Dr | $ 1,100.00 | |
To Bank A/c | $ 1,100.00 | ||
8 | Computer A/c…Dr | $ 900.00 | |
Printer A/c……..Dr | $ 79.00 | ||
To Accounts Payables A/c | $ 979.00 | ||
9 | Accounts Payables A/c…….Dr | $ 979.00 | |
To Bank A/c | $ 979.00 | ||
10 | Inventory (Office Supplies)….Dr | $ 450.00 | |
To Bank A/c | $ 450.00 | ||
11 | Accounts Recievables…..Dr | $ 2,800.00 | |
To Plumbing Repairs ( Income) A/c | $ 2,800.00 | ||
12 | Pick Up Truck…..Dr | $ 7,500.00 | |
To Accounts Payables A/c | $ 7,500.00 | ||
13 | Labour Expenses……Dr | $ 500.00 | |
To Bank A/c | $ 500.00 | ||
14 | Bank A/c……… Dr | $ 14,280.00 | |
To Accounts Recievables A/c | $ 14,280.00 | ||
15 | Accounts Recievables A/c……………Dr | $ 2,856.00 | |
To Plumbing Repairs ( Income) A/c | $ 2,856.00 | ||
( $14280/ 75 Days *15 Days) | |||
16 | Bank A/c……… Dr | $ 390.00 | |
To Plumbing Repairs ( Income) A/c | $ 390.00 | ||
17 | Electric and Water Expenses….Dr | $ 250.00 | |
To Accounts Payables A/c | $ 250.00 | ||
18 | Bank A/c……… Dr | $ 26,000.00 | |
To Loan A/c | $ 26,000.00 | ||
19 | Accounts Payables A/c…….Dr | $ 2,000.00 | |
To Bank A/c | $ 2,000.00 | ||
20 | Advertising Expenes…..Dr | $ 200.00 | |
To Accounts Payables A/c | $ 200.00 | ||
21 | Accounts Payables A/c…….Dr | $ 200.00 | |
To Bank A/c | $ 200.00 | ||
22 | Office Building A/c…..Dr | $ 28,000.00 | |
To Accounts Payables A/c | $ 28,000.00 | ||
23 | Drawings A/c……Dr | $ 2,000.00 | |
To Bank A/c | $ 2,000.00 | ||
24 | Depreciation Expense…..Dr | $ 100.00 | |
To Depreciation on Plumbing Tools | $ 100.00 | ||
25 | Depreciation Expense…..Dr | $ 15.00 | |
To Depreciation on Computer | $ 15.00 | ||
26 | Depreciation Expense…..Dr | $ 51.00 | |
To Depreciation on Pick Up Truck A/c | $ 51.00 | ||
27 | Cost of Goods Sold……Dr | $ 100.00 | |
To Inventory A/c | $ 100.00 | ||
Interest Expense……Dr' | $ 195.00 | ||
To Interest Payable A/c | $ 195.00 | ||
(26,000*9% /12) |
Income Statement | |
Particulars | amount |
Income | |
Plumbing Repairs Income | 6046 |
Cost of Goods Sold | -100 |
Gross Margin (A) | 5946 |
Operating Expenses | |
Depreciation | 166 |
Rent | 833.33 |
Insurance | 200 |
Other Expenses | 950 |
total (b) | 2149.33 |
Earning before Interest and Taxes (a-b) | 3796.67 |
Interest Expense | -195 |
Earning Before Taxes | 3601.67 |
BALANCE SHEET | |||
Assets | amount | Liabilities | amount |
Cash | $ 126,341 | Loan | $ 26,000 |
Accounts Recievables | $ (8,624) | Accounts Payables | $ 39,350 |
Inventory | $ 350 | Interest Payable | $ 195 |
Other Current Assets | $ 3,867 | ||
Owners Capital | $ 82,520 | ||
Total Current Assets | $ 121,934 | Retained Earnings | $ 3,602 |
Drawings | $ (2,000) | ||
Plumbing Tools | $ 5,600 | Owners Equity and Capital | $ 84,122 |
Accumulated Depreciation | $ 100 | ||
Net Plumbing Tools | $ 5,500 | ||
Computer and Printer | $ 979 | ||
Accumulated Depreciation | $ 15 | ||
Net Computer and Printer | $ 964 | ||
Pick Up Truck | $ 7,500 | ||
Accumulated Depreciation | $ 51 | ||
Net Pick Up Truck | $ 7,449 | ||
Vehicle | $ 13,820 | ||
Total Assets | $ 149,667 | Total Liabilities | $ 149,667 |