Question

For each transaction, (1) analyze the transaction using tha accounting equation, (2)record the transaction in journal entry form and (3)post the entry using T accounts to represent ledger accounts. Use the partial chart of accounts - account numbers in parentheses: cash(101); Acct receivable (106); Office supplies (124); Trucs (153); Equipment (167) Acct payable (201);unearned landscaping revenue (236); common stock (307); Dividends (319); Wages expenses (601) and landscaping expense(696).

a. On May 15 Taylor opens a landscaping company called Elegant Lawns by investing $84,000 in cash along with Equipment having a $44,000 value in exchange for common stock.
b. On May 21, Elegant Lawns purchases Office supplies on credit for $560.
c. On May 25. Elegant Lawns recives $9,200 cash for performing landscaping services.
d. On May 30, Elegant Lawns receives $2,400 cash in advance of providing landscaping services to a customer.

Answer 1

To analyze and record the transactions of a landscaping company, we use the accounting equation to understand the changes in assets, liabilities, and equity; then prepare journal entries and post them to T accounts, which categorize and balance assets on one side and liabilities and equity on the other side.

Step-by-step explanation:

Accounting Transaction Analysis and Journal EntriesFor the transactions of a landscaping company, we first analyze each event using the accounting equation, then record them in journal entry form, and finally post them using T accounts to represent ledger accounts.a. May 15: Investment in Exchange for Common StockAccounting Equation: Increase in Cash (Assets) + Increase in Equipment (Assets) = Increase in Common Stock (Equity)Journal Entry: Debit Cash for $84,000, Debit Equipment for $44,000, Credit Common Stock for $128,00T Accounts: Cash and Equipment are debited (left side), Common Stock is credited (right side).b. May 21: Office Supplies Purchase on CreditAccounting Equation: Increase in Office Supplies (Assets) = Increase in Accounts Payable (LiabilitiesJournal Entry: Debit Office Supplies for $560, Credit Accounts Payable for $560.

T Accounts: Office Supplies are debited, Accounts Payable are credited.c. May 25: Cash Received for Landscaping ServicesAccounting Equation: Increase in Cash (Assets) = Increase in Landscaping Revenue (EquityJournal Entry: Debit Cash for $9,200, Credit Landscaping Revenue for $9,200T Accounts: Cash is debited, Landscaping Revenue is creditedd. May 30: Cash Received in Advance of ServicesAccounting Equation: Increase in Cash (Assets) = Increase in Unearned Landscaping Revenue (LiabilitiesJournal Entry: Debit Cash for $2,400, Credit Unearned Landscaping Revenue for $2,400T Accounts: Cash is debited, Unearned Landscaping Revenue is credited.