Question

The following transactions were completed by B&A Sales & Service

1. The owner opens the checking account by making a deposit of $10,000 with his personal funds. (1-1-18)
2. Purchase a desk for the office of $1000. (1-5-18)
3. Purchase inventory to sell $5000. (1-5-18)
4. Paid rent $750. (1-5-18)
5. Purchase vehicle $8000 with a loan. (1-8-18)
6. Insurance paid $250. (1-10-18)
7. Equipment purchased $2600 with a loan. (1-15-18)
8. Cash sales $1500. (1-17-18)
9. Cost of Goods sold for entry #8 is $900 (1-17-18)
10. Office supplies purchased $625. (1-20-18)
11. Utilities paid $175. (1-21-18)
12. Gas purchased $100. (1-23-18)
13. Paid employee $500. (1-27-18)
14. Owner drew out $1000. (1-31-18)

Instructions:

1. Record the journal entries in the ledger.
2. Post entries to the T-accounts
3. Prepare January financial statements (Balance Sheet, Income Statement, Statement of Owner's Equity)

**Please explain all answers if possible.

Chart of Accounts

Cash                                        Owner’s Equity                         Vehicle Expense

Inventory                                 Owner’s Draw                           Utilities Expense

Furniture                                  Sales                                        Payroll Expense

Equipment                                Cost of Goods Sold

Vehicles                                    Rent Expense

Loan Payable-Equipment           Insurance Expense

Loan Payable-Vehicle                Office Supplies Expense

Answer 1

Prepare journal entries as follows:

Date	Account Titles and Explanation	Debit	Credit
01/01/2018	Cash	$10,000
	Owner's Equity		$10,000
	(To record issue of capital)
01/05/2018	Furniture	$1,000
	Cash		$1,000
	(To record purchase of furniture)
01/05/2018	Inventory	$5,000
	Cash		$5,000
	(To record purchase of inventory)
01/05/2018	Rent Expense	$750
	Cash		$750
	(To record payment of rent)
01/08/2018	Vehicles	$8,000
	Loan payable-Vehicles		$8,000
	(To record purchase of vehicles)
01/10/2018	Insurance Expense	$250
	Cash		$250
	(To record insurance expense)
01/15/2018	Equipment	$2,600
	Loan payable-Equipment		$2,600
	(To record purchase of Equipment)
01/17/2018	Cash	$1,500
	Sales		$1,500
	(To record cash sales)
01/17/2018	COGS	$900
	Inventory		$900
	(To record COGS sales)
01/20/2018	Office supplies expense	$625
	Cash		$625
	(To record office supplies expense)
01/21/2018	Utilities Expense	$175
	Cash		$175
	(To record utilities expense)
01/23/2018	Utilities Expense	$100
	Cash		$100
	(To record utilities expnense)
01/27/2018	Payroll expense	$500
	Cash		$500
	(To record payroll expense)
01/31/2018	Owner's Drawing	$1,000
	Cash		$1,000
	(To record withdrawal)

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Prepare T-accounts as follows:

Cash					Rent Expense
01/01/2018	$10,000	01/05/2018	$1,000		01/05/2018	$750
01/17/2018	$1,500	01/05/2018	$5,000
		01/05/2018	$750		End. Bal.	$750
		01/10/2018	$250
		01/20/2018	$625		Vehicles
		01/21/2018	$175		01/08/2018	$8,000
		01/23/2018	$100
		01/27/2018	$500		End. Bal.	$8,000
		01/31/2018	$1,000
					Loan payable-Vehicles
End. Bal.	$2,100						01/08/2018	$8,000
Owner's Equity							End. Bal.	$8,000
		01/01/2018	$10,000
					Insurance Expense
		End. Bal.	$10,000		01/10/2018	$250
Furniture					End. Bal.	$250
01/05/2018	$1,000
					Equipment
End. Bal.	$1,000				01/15/2018	$2,600
Inventory					End. Bal.	$2,600
01/05/2018	$5,000	01/17/2018	$900
					Loan payable-Equipment
							01/15/2018	$2,600
End. Bal.	$4,100
							End. Bal.	$2,600
Sales
		01/17/2018	$1,500		Office Supplies Expense
					01/20/2018	$625
		End. Bal.	$1,500
					End. Bal.	$625
COGS
01/17/2018	$900				Utilities Expense
					01/21/2018	$175
End. Bal.	$900				01/23/2018	$100
Payroll Expense					End. Bal.	$275
01/27/2018	$500
End. Bal.	$500
Owner's Drawings
01/31/2018	$1,000
End. Bal.	$1,000

_____________________________________________________________

Prepare trial balance as follows:

______________________________________________________

Prepare financial statement as follows: