Question

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.

1. Prepare journal entries to record the July transactions in the General Journal

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
3. Prepare a trial balance for July 4. Prepare adjusting entries using the following information in the General Journal below. Show your calculations! a) One month's insurance has expired. b) The remaining inventory of supplies is $300. c) The estimated depreciation on equipment is $125. d) The estimated income taxes are $2700.

Answer 1