Question

B1 - Snow Company started operations on February 1, 2020 by depositing $3,000,000 cash in the bank as capital. The following transactions took place during the first month of operations:

February 3: Purchased supplies for $22,500 in cash.

February 9: Purchased equipment for $255,000, paid $105,000 in cash and the remaining amount will be paid after 10 days.

February 12: Received a bill from Dubai News for advertising amounted to $1,650.

February 14: Paid $24,000 salaries in cash.

February 16: Paid $6,000 utilities expense in cash.

February 17: Provided services to customers for $195,000 in cash.

February 19: Paid $150,000 for equipment purchased on February 9.

February 28: The owner withdrew $7,500 cash for personal use.

Required:

1. Prepare journal entries to record the above transactions.
2. Post to the appropriate ledger accounts.

Answer 1

Date	Account Titles	Debit	Credit
Feb-01	Cash	$         3,000,000
	Capital		$          3,000,000
Feb-03	Supplies	$               22,500
	Cash		$                22,500
Feb-09	Equipment	$            255,000
	Cash		$              105,000
	Accounts Payable		$              150,000
Feb-12	Advertisement Expense	$                 1,650
	Accounts Payable		$                  1,650
Feb-14	Salaries Expense	$               24,000
	Cash		$                24,000
Feb-16	Utilities Expense	$                 6,000
	Cash		$                  6,000
Feb-17	Cash	$            195,000
	Service Revenue		$              195,000
Feb-19	Accounts Payable	$            150,000
	Cash		$              150,000
Feb-28	Drawings	$                 7,500
	Cash		$                  7,500

Cash					Accounts Receivable
Beg Bal					Beg Bal
Feb-01	$   3,000,000.00	$          22,500.00	Feb-03
Feb-17	$      195,000.00	$        105,000.00	Feb-09
		$          24,000.00	Feb-14
		$            6,000.00	Feb-16
		$        150,000.00	Feb-19
		$            7,500.00	Feb-28
End Bal	$   2,880,000.00				End Bal	$                       -
Supplies					Equipment
Beg Bal					Beg Bal
Feb-03	$         22,500.00				Feb-09	$     255,000.00
End Bal	$         22,500.00				End Bal	$     255,000.00
Capital					Accounts Payable
		$    3,000,000.00	Feb-01		Beg Bal
						$     150,000.00	$       150,000.00	feb9
							$           1,650.00	feb12
End Bal		$    3,000,000.00	End Bal		End Bal		$           1,650.00	End Bal
Service Revenue					Salaries Expense
Beg Bal					Beg Bal	$                       -
		$        195,000.00	Feb-17		Feb-14	$       24,000.00
End Bal					End Bal	$       24,000.00
Advertisement Expense					Utilities Expense
Beg Bal	$                        -				Beg Bal	$                       -
Feb-12	$           1,650.00				Feb-16	$          6,000.00
End Bal	$           1,650.00				End Bal	$          6,000.00
Drawings
Beg Bal	$                        -
Feb-28	$           7,500.00
End Bal	$           7,500.00