Transaction Analysis, T Accounts, and Trial Balance

P8. B. Turner opened a school for administrative skills called Blitz Secretarial Training.

a.    

Cash $11,400 Computers 8,600 Office Equipment 7,200   Â

Turner contributed the following assets to the business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

b.     Found a location for his business and paid the first month’s rent, $520.

c.      Paid for an advertisement announcing the opening of the school, $380.

d.     Received applications from three students for a four-week secretarial program and two students for a ten-day keyboarding course. The students will be billed a total of

$2,600.

e.      Purchased supplies on credit, $660.

f.      Billed the enrolled students, $3,480.

g.     Purchased a second-hand computer, $960, and office equipment, $760, on credit.

h.     Paid for the supplies purchased on credit in e, $660.

i.       Paid cash to repair a broken computer, $80.

j.       Received partial payment from students previously billed, $2,160.

k.     Paid the utility bill for the current month, $180.

l.       Paid an assistant one week’s salary, $880.

m.   Made a cash withdrawal of $600.

ReQUIReD

1.    Set up the following T accounts: Cash; Accounts Receivable; Supplies; Comput- ers; Office Equipment; Accounts Payable; B. Turner, Capital; B. Turner, Withdraw- als; Tuition Revenue; Salaries Expense; Utilities Expense; Rent Expense; Repair Expense; and Advertising Expense.

2.    Record the transactions directly in the T accounts, using the transaction letter to identify each debit and credit.

3.    Prepare a trial balance using today’s date.

4.    Business AppliCAtion ▶ Examine transactions f and j. What were the revenues and how much cash was received from the revenues? What business issues might you see arising from the differences in these numbers?