Transaction Analysis, Journal Form, T Accounts, and Trial Balance

P4. Sid Patel bid for and won a concession to rent bicycles in the local park during the summer. During the month of April, Patel completed the following transactions for his bicycle rental business:

Apr.      2     Began business by placing $14,400 in a business checking account in   the name of the company.

3        Purchased supplies on account for $300.

4        Purchased 10 bicycles for $5,000, paying $2,400 down and agreeing to pay the rest in 30 days.

5        Paid $5,800 in cash for a small shed to store the bicycles and to use for other operations.

8        Paid $800 in cash for shipping and installation costs (considered an addition to the cost of the shed) to place the shed at the park entrance.

9        Hired a part-time assistant to help out on weekends at $14 per hour.

10         Paid a maintenance person $150 to clean the grounds.

13      Received $1,940 in cash for rentals.

17         Paid $300 for the supplies purchased on April 3.

18         Paid a $110 repair bill on bicycles.

23      Billed a company $220 for bicycle rentals for an employee outing.

25      Paid the $200 fee for April to the Park District for the right to operate  the bicycle concession.

27      Received $1,920 in cash for rentals.

29         Paid the assistant $480.

30         Made a cash withdrawal of $1,000.

ReQUIReD

1.    Prepare journal entries to record these transactions.

2.    Set up the following T accounts and post all the journal entries: Cash; Accounts Receivable; Supplies; Shed; Bicycles; Accounts Payable; S. Patel, Capital; S. Patel, Withdrawals; Rental Revenue; Wages Expense; Maintenance Expense; Repair Expense; and Concession Fee Expense.

3.    Prepare a trial balance for Patel Rentals as of April 30, 2014.

4.    ConCept ▶ Compare and contrast how the issues of recognition, valuation, and classification are settled in the transactions of April 3 and 10.