Question

On April 1, Ted's Golfing School had the following accounts, some with balances and some without: Cash $3000; Accounts Receivable/P. Moores $150; Accounts Receivable/L. Troop; Equipment $4700, Accounts Payable/Jack's Repair Shop $750; T. Craig, Capital $7100; Fees Income; Advertising Expense; Rent Expense; Equipment Repairs Expense; Utilities Expense. Set up the general ledger for Ted's Golfing School on April 1 and record the transactions listed below. (b) On April 12, balance the accounts and prepare a trial balance, an income statement for the two weeks, and a balance sheet. Received $300 cash from customers for golf lessons. Issued a bill for $95 to L. Troop for lessons that will be paid for later. Paid $1400 cash to United Realty for the monthly rent. Received $50 cash from P. Moores to be applied to amount outstanding. Received a $175 bill from Jack's Repair Shop for repairing equipment. Received $2000 cash from customers for lessons. Issued another $45 bill to L. Troop for lessons. Received $100 cash from P. Moores to pay balance owed. Received a $500 bill for equipment bought from Jack's Repair Shop. Paid $90 cash for electricity and water. Paid $300 to Jack's Repair Shop to reduce the balance owing. Paid $355 cash to the Gazette for advertising. Apr. 2 2234 5881822N 9 10

Answer 1

To create a general ledger for Ted's Golfing School, start by establishing T-accounts with initial balances. Record the transactions to affect relevant accounts, and then use the updated balances to prepare a trial balance, an income statement, and a balance sheet as of April 12.

Step-by-step explanation:

Setting Up the General Ledger

To set up the general ledger for Ted's Golfing School, we start by creating a T-account for each of the initial accounts mentioned, recording the starting balances as given on April 1. We then record each transaction on the appropriate date, noting the effects on each account.

Transactions and Impact on Accounts

• Received $300 cash for golf lessons: Increase Cash, Increase Fees Income.
• Issued a bill for $95 to L. Troop: Increase Accounts Receivable/L. Troop, Increase Fees Income.
• Paid $1400 for rent: Decrease Cash, Increase Rent Expense.
• Received $50 from P. Moores: Decrease Accounts Receivable/P. Moores, Increase Cash.
• Received a $175 bill for repairs: Increase Equipment Repairs Expense, Increase Accounts Payable/Jack's Repair Shop.
• Received $2000 cash for lessons: Increase Cash, Increase Fees Income.
• Issued another $45 bill to L. Troop: Increase Accounts Receivable/L. Troop, Increase Fees Income.
• Received $100 from P. Moores: Decrease Accounts Receivable/P. Moores, Increase Cash.
• Received a $500 bill for equipment: Increase Equipment, Increase Accounts Payable/Jack's Repair Shop.
• Paid $90 for utilities: Decrease Cash, Increase Utilities Expense.
• Paid $300 to reduce payable: Decrease Cash, Decrease Accounts Payable/Jack's Repair Shop.
• Paid $355 for advertising: Decrease Cash, Increase Advertising Expense.

Financial Statements Preparation

On April 12, after recording all these transactions, we balance the individual T-accounts. Next, we prepare a trial balance by listing the ending balances of all accounts to ensure that debits equal credits. From the trial balance, we create an income statement to summarize revenues and expenses, resulting in the net income for the two-week period. Finally, we construct the balance sheet to show the financial position of Ted's Golfing School on April 12, including assets, liabilities, and the owner's equity.