Question

Mike Greenberg opened Concord Window Washing Inc. on July 1, 2025. During July, the following transactions were completed. July 1 Issued 13,200 shares of common stock for $13,200 cash. 1 Purchased used truck for $8,800, paying $2,200 cash and the balance on account. 3 Purchased cleaning supplies for $990 on account. 5 Paid $2,040 cash on a 1 -year insurance policy effective July 1. 12 Billed customers $4,070 for cleaning services performed. 18. Paid $1,100 cash on amount owed on truck and $550 on amount owed on cleaning supplies, 20 Paid $2,200 cash for employee salaries. 21 Collected \$1,760 cash from customers billed on July 12. 25 Billed customers $2,750 for cleaning services performed. 31 Paid $320 for maintenance of the truck during month. 31 Declared and paid $660 cash dividend. The chart of accounts for Concord Window Washing contains the following accounts: Cash, Accounts Recelvable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation-Equipment, Accounts Payable, Salaries and Wages Payable, Common Stock, Retained Earnings, Dividends. Income Summary, Service Revenue, Maintenance and Repairs Expense, Supplies Expense, Depreciation Expense, Insurance Expense, and Salaries and Wages Expense. Common Stock Dividends Service Revenue Maintenance and Repairs Expense Salaries and Wages Expense

Answer 1

The question relates to the recording of business transactions for Concord Window Washing Inc. and their impact on the financial statements, which are important concepts in financial accounting for a company.

Step-by-step explanation:

The student's question involves recording and understanding various business transactions for a newly opened company, Concord Window Washing Inc., and identifying their impact on the company's financial statements. The transactions include issuing common stock, purchasing equipment, acquiring supplies on account, paying for insurance, billing customers for services, paying off debt related to the truck, paying employee salaries, and declaring dividends. To accurately record these transactions, one would typically make journal entries to reflect increases or decreases in the company's assets, liabilities, and equity accounts.

As this is a fundamental component of financial accounting, it is essential to have a strong understanding of the double-entry bookkeeping system, where each transaction affects at least two accounts to keep the accounting equation (Assets = Liabilities + Equity) in balance.

Answer 2

The transactions provided will impact various accounts such as Cash, Common Stock, Supplies, Prepaid Insurance, Equipment, and Service Revenue, by the principles of double-entry bookkeeping.

Step-by-step explanation:

The student's question relates to the journalizing of transactions for Concord Window Washing Inc. Using the provided transactions, each financial event would affect various accounts in the company's ledger. For instance, when the company issues common stock for cash, it would debit the Cash account and credit the Common Stock account. Purchasing a truck involves debiting Equipment and crediting Cash for the amount paid, and Accounts Payable for the balance. Similarly, purchasing supplies on account increases the Supplies account (debit) and Accounts Payable (credit), while paying insurance in advance increases Prepaid Insurance (debit) and decreases Cash (credit).

Revenue from services billed to customers would increase Accounts Receivable (debit) and Service Revenue (credit). Payments on the truck and supplies would decrease Accounts Payable (credit) and Cash (debit). Salaries paid decrease Cash (debit) and might also decrease Salaries and Wages Payable (credit) if the salaries are recorded as payable. Cash collected from customers decreases Accounts Receivable (debit) and increases Cash (credit). Regular maintenance expenses for the truck would decrease Cash (debit) and increase Maintenance and repair expenses (credit). Finally, declaring and paying dividends would decrease Cash (debit) and Retained Earnings or Dividends (credit).