Transaction Analysis, T Accounts, and Trial Balances

p9. David Roberts began an upholstery cleaning business on August 1 and engaged in the following transactions during the month:

Aug.   1      Began business by depositing $30,000 in a bank account in the name of the corporation in exchange for 30,000 shares of $1 par value common stock.

2        Ordered cleaning supplies, $6,000.

3        Purchased cleaning equipment for cash, $5,600.

4        Made two months’ van lease payment in advance, $2,400.

7     Received the cleaning supplies ordered on August 2 and agreed to pay half the amount in 10 days and the rest in 30 days.

9     Paid for repairs on the van with cash, $2,160.

12      Received cash for cleaning upholstery, $1,920.

17      Paid half the amount owed on supplies received on August 7, $3,000.

21      Billed customers for cleaning upholstery, $2,680.

24      Paid cash for additional repairs on the van, $160.

27      Received $1,200 from the customers billed on August 21.

31      Declared and paid a dividend of $1,400.

ReQUIReD

1.    Set up the following T accounts: Cash; Accounts Receivable; Cleaning Supplies; Prepaid Lease; Cleaning Equipment; Accounts Payable; Common Stock; Dividends; Cleaning Revenue; and Repair Expense.

 

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2.    Record transactions directly in the T accounts. Identify each entry by date.

3.    Prepare a trial balance for Roberts Upholstery Cleaning as of August 31, 2014.

4.    ConCept ▶ Compare and contrast how the issues of recognition, valuation, and classification are settled in the transactions of August 7 and