Question

On June 1 of the current year, Pamela Schatz established a business to manage rental property. She completed the following transactions during June:_______.
Opened a business bank account with a deposit of $25,000 from personal funds.
Purchased office supplies on account, $2,600.
Received cash from fees earned for managing rental property, $7,030.
Paid rent on office and equipment for the month, $3,190.
Paid creditors on account, $1,180.
Billed customers for fees earned for managing rental property, $5,910.
Paid automobile expenses (including rental charges) for the month, $710, and miscellaneous expenses, $350.
Paid office salaries, $2,250.
Determined that the cost of supplies on hand was $1,540; therefore, the cost of supplies used was $1,060.
Withdrew cash for personal use, $2,130.
Required:1. Indicate the effect of each transaction and the balances after each transaction:For those boxes in which no entry is required, leave the box blank.For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

Answer 1

Answer:

Opened a business bank account with a deposit of $25,000 from personal funds.

Dr Cash 25,000

    Cr Schatz, Pamela, capital 25,000

the account balances:

Cash 25,000

Schatz, Pamela, capital 25,000

Purchased office supplies on account, $2,600.

Dr Supplies 2,600

    Cr Accounts payable 2,600

the account balances:

Supplies 2,600

Accounts payable 2,600

Received cash from fees earned for managing rental property, $7,030.

Dr Cash 7,030

    Cr Service revenue 7,030

the account balances:

Cash 32,030

Service revenue 7,030

Paid rent on office and equipment for the month, $3,190.

Dr Rent expense 3,190

    Cr Cash 3,190

the account balances:

Cash 28,840

Rent expense 3,190

Paid creditors on account, $1,180.

Dr Accounts payable 1,180

    Cr Cash 1,180

the account balances:

Cash 27,660

Accounts payable 1,420

Billed customers for fees earned for managing rental property, $5,910.

Dr Accounts receivable 5,910

    Cr Service revenue 5,910

the account balances:

Accounts receivable 5,910

Service revenue 12,940

Paid automobile expenses (including rental charges) for the month, $710, and miscellaneous expenses, $350.

Dr Rent expense 710

Dr Miscellaneous expenses 350

    Cr Cash 1,060

the account balances:

Cash 26,600

Rent expense 3,900

Miscellaneous expenses 350

Paid office salaries, $2,250.

Dr Wages expense 2,250

    Cr Cash 2,250

the account balances:

Cash 24,350

Wages expense 2,250

Determined that the cost of supplies on hand was $1,540; therefore, the cost of supplies used was $1,060.

Dr Supplies expense 1,060

    Cr Supplies 1,060

the account balances:

Supplies 1,540

Supplies expense 1,060

Withdrew cash for personal use, $2,130.

Dr Schatz, Pamela, drawings 2,130

    Cr Cash 2,130

the account balances:

Cash 22,220

Schatz, Pamela, capital 22,870