Question

More info a. The business received cash of $58,000 and a building with a fair value of $98,000. The corporation issued common stock to the stockholders. b. Borrowed $63,000 from the bank; signed a note payable. c. Paid $44,000 for music equipment. d. Purchased supplies on account, $320. e. Paid employees' salaries, $6,700. f. Received $4,000 for music services performed for customers. g. Performed services for customers on account, $13,600. h. Paid $150 of the account payable created in transaction d. i. Received a(n)$650 bill for utilities expense that will be paid in the near future. j. Received cash on account, $1,900. k. Paid the following cash expenses: (1) rent, $800; (2) advertising, $300. Requirement 1. Record each transaction directly in the T-accounts without using a journal. Use the letters to identify the transactions. Determine the ending balance in each account. Supplies Salary Expense Advertising Expense Accounts Payable Utilities Expense Note Payable

Answer 1

The question involves recording a series of business transactions in T-accounts and determining the ending balance of each account, using the double-entry accounting system.

Step-by-step explanation:

Recording Transactions in T-Accounts

The question requires setting up T-accounts for various transactions and calculating the ending balance for each account. It is essential to understand the dual aspect of accounting, which means every transaction affects at least two accounts. Each of the transactions provided by the student—such as receiving cash and a building in exchange for common stock issuance, borrowing money, purchasing equipment, and paying expenses—should be recorded in the respective T-accounts for assets, liabilities, equity, and expenses.

For example, when the business receives cash of $58,000 and a building valued at $98,000 for issuing common stock, both the cash and building T-accounts are debited, while the common stock T-account is credited. The borrowed $63,000 from the bank leads to a debit in cash and a credit in notes payable. Paying $44,000 for music equipment reduces cash and increases equipment assets. Each action is reflected in a corresponding debit or credit in the appropriate T-account to maintain the balance.