Question

The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances:

Accounts Debits Credits
Cash $3,800
Accounts Receivable 8,800
Supplies 2,800
Equipment 22,000
Accumulated Depreciation $5,200
Accounts Payable 3,200
Utilities Payable 4,200
Deferred Revenue 0
Common Stock 16,000
Retained Earnings 8,800
Totals $37,400 $37,400

The following is a summary of the transactions for the year:

1. January 24 Provide plumbing services for cash, $13,000, and on account, $58,000.
2. March 13 Collect on accounts receivable, $46,000.
3. May 6 Issue shares of common stock in exchange for $12,000 cash.
4. June 30 Pay salaries for the current year, $31,600.
5. September 15 Pay utilities of $4,200 from 2020 (prior year).
6. November 24 Receive cash in advance from customers, $7,200.
7. December 30 Pay $1,600 cash dividends to stockholders.

Required:
Prepare each of the summary transactions listed above.

Answer 1

January 24

Debit : Accounts Receivables $58,000

Debt : Cash $13,000

Credit : Service Revenue $71,000

March 13

Debit : Cash $46,000

Credit : Accounts Receivable $46,000

May 6

Debit : Cash $12,000

Credit : Common Stock $12,000

June 30

Debit : Salaries $31,600

Credit : Cash $31,600

September 15

Debit : Utilities Payable $4,200

Credit : Cash $4,200

November 24

Debit : Cash $7,200

Credit : Deferred Service Revenue $7,200

December 30

Debit : Dividends $1,600

Credit : Cash $1,600

Step-by-step explanation:

When payment for goods or services does not happen immediately, raise an Account Receivable or Account Payable otherwise recognize a Cash change.