Question

Requirement #1:
During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation,
completed the following transactions.
July 1	Began business by making a deposit in a company bank account of $40,000, in exchange
	for 4,000 shares of $10 par value common stock.
July 3	Paid the current month's rent, $2,500
July 5	Paid the premium on a 1-year insurance policy, $3,600
July 7	Purchased supplies on account from Little Company, $700.
July 10	Paid employee salaries, $2,800
July 14	Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was
	placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1.
	Note: Use accounts payable for the balance due.
July 15	Received cash for preparing tax returns for the first half of July, $6,500
July 19	Made payment on account to Lake Company, $500.
July 31	Received cash for preparing tax returns for the last half of July, $8,250
July 31	Declared and paid cash dividends of $450.
Prepare journal entries to record the July transactions in the General Journal below.
			General Journal
Date	Description(Account Name)			Debit	Credit
	Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Tax Preparation Revenue Prepaid Insurance (117) Rent Expense (511) Supplies (119) Salaries Expense (512) Equipment (144) Insurance Expense (513) Accumulated Depreciation-Equipment (145) Supplies Expense (514) Accounts Payable (212) Depreciation Expense (515) Income Tax Payable (213) Income Tax Expense (516) Common Stock (311) Retained Earnings (312) Dividends (313

Answer 1

Date Particulars Debit($) Credit($) Jul-01 Cash 40000 Common Stock 40000 03-Jul Rent 2500 Cash 2500 05-Jul Insurance Expense 3600 Cash 3600 05-Jul Prepaid Insurance 3300 Insurance Expense 3300 07-Jul Supplies 700 Accounts Payable 700 10-Jul Salary 2800 Cash 2800 14-Jul Equipment 9500 cash 1500 Accounts Payable 8000 15-Jul Cash 6500 Tax Preparation Revenue 6500 19-Jul Accounts Payable 500 Cash 500 31-Jul Dividend 450 Cash 450 31-Jul Cash 8250 Tax Preparation Revenue 8250 31-Jul Depreciation 760 Accumulated Depreciation 760

Requirement 2:

Cash Date Debit Credit 01-Jul 40000 03-Jul 2500 05-Jul 3600 10-Jul 2800 14-Jul 1500 19-Jul 500 31-Jul 8250 450 15-Jul 6500 Total 54750 11350 Clsing Balance 43400 Insurance Expense Date Debit Credit 05-Jul 3600 05-Jul 3300 Closing Balance 300 Rent Date Debit Credit 03-Jul 2500 Closing Balance 2500 Supplies Date Debit Credit 07-Jul 700 Closing Balance 700 Accounts Payable Date Debit Credit 07-Jul 700 14-Jul 8000 19-Jul 500 Closing Balance 8200 Salary Date Debit Credit 10-Jul 2800 Closing Balance 2800 Equipment Date Debit Credit 14-Jul 9500 Closing Balance 9500 Tax Return Preparation Revenue Date Debit Credit 15-Jul 6500 31-Jul 8250 Closing Balance 14750 Dividend Date Debit Credit 31-Jul 450 Closing Balance 450 Derpreciation Date Debit Credit 31-Jul 760 Closing Balance 760 Accumulated Depreciation Date Debit Credit 31-Jul 760 Closing Balance 760