| Cody Macedo established an insurance agency on January 1 of the current year and completed the following transactions during January: |
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| (a) |
Opened a business bank account with a deposit of $75,000 in exchange for capital stock. |
| (b) |
Purchased supplies on account, $3,000. |
| (c) |
Paid creditors for account, $1,000. |
| (d) |
Received cash from fees earned on insurance commissions, $11,800. |
| (e) |
Paid rent on office and equipment for the month, $4,000. |
| (f) |
Paid automobile expenses for month, $600, and miscellaneous expenses, $200. |
| (g) |
Paid office salaries, $2,500. |
| (h) |
Determined that the cost of supplies on hand was $1,900; therefore, the cost of supplies used during the month was $1,100. |
| (i) |
Billed insurance companies for sales commissions earned, $12,500. |
| (j) |
Paid dividends, $5,000. |
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| To Do: |
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| 1 |
In tabular form, indicate the effect each transaction has on the accounts. Calculate the balance of each account after all the transactions have been entered. |
| 2 |
Using the account balances at the end of the month, prove the accounting equation is in balance. |
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