Question

Question #1

Instructions: Complete the projects as directed.
Question: Prepare a T-account for the Sanchez Service Company using the information provided.

1. Fred Sanchez started a business by investing $15,000.
2. Bought $600 worth of equipment and $150 worth of office supplies on credit. (Hint: this is a compound entry.)
3. Received $500 in cash for completed work.
4. Paid $40 for the phone bill.
5. Completed $200 of work and sent a bill to the customer.
6. Fred Sanchez took $10 out of the company’s cash register to buy his lunch.
7. Bought $30 worth of office supplies for cash.
8. Paid $300 cash of what is owed on the equipment bought in transaction 2.
9. Received $200 from the customer who owed for the work done in transaction 5.
10. Received $100 from a customer and agreed to do the work next month.
T-account for The Sanchez Service Company
Cash
Accounts Payable
Fred Sanchez, Capital
Accounts Receivable
Unearned Service Fees
Fred Sanchez, Withdrawals
Office Supplies
Service Fees
Office Equipment
Telephone Expense

Answer 1

To prepare a T-account for the Sanchez Service Company, transactions are recorded as debits and credits in corresponding T-accounts, which reflect changes in assets, liabilities, and owner's equity.

To prepare a T-account for the Sanchez Service Company, we need to record each transaction in the respective accounts. Each transaction affects at least two accounts due to the double-entry accounting system.

1. Fred Sanchez started a business by investing $15,000, increasing Cash and Fred Sanchez, Capital.
2. Bought equipment and office supplies on credit, increasing Office Equipment, Office Supplies, and Accounts Payable.
3. Received $500 in cash for completed work, increasing Cash and Service Fees.
4. Paid $40 for the phone bill, decreasing Cash and increasing Telephone Expense.
5. Completed $200 of work and billed the customer, increasing Accounts Receivable and Service Fees.
6. Fred Sanchez took $10 out of the company's cash for lunch, decreasing Cash and increasing Fred Sanchez, Withdrawals.
7. Bought $30 worth of office supplies for cash, decreasing Cash and increasing Office Supplies.
8. Paid $300 cash for equipment owed, decreasing Cash and Accounts Payable.
9. Received $200 from accounts receivable, increasing Cash and decreasing Accounts Receivable.
10. Received $100 for future work, increasing Cash and Unearned Service Fees.

Each entry corresponds to the transactions listed, with the T-account listing the accounts affected, and whether they are debited or credited.