Question

Carla Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions.

Aug. 2 Invested $11,280 cash and $2,340 of equipment in the business.
7 Purchased supplies on account for $550. (Debit asset account.)
12 Performed services for clients, for which $1,348 was collected in cash and $631 was billed to the clients.
15 Paid August rent $617.
19 Counted supplies and determined that only $291 of the supplies purchased on August 7 are still on hand.

Answer 1

Carla Repair Shop

General Journal

Aug. 2

Cash $11,280 (debit)

Equipment $2,340 (credit)

Capital $13,620 (credit)

Owner Investment of Cash and Equipment

Aug. 7

Supplies $550 (debit)

Accounts Payable $550 (credit)

Supplies Purchased on Credit

Aug. 12

Cash $1,348 (debit)

Accounts Receivable $631 (credit)

Service Revenue $1,979 (credit)

Service Rendered for Cash and on Credit

Aug. 15

Rent Expense $617 (debit)

Cash $617 (credit)

Rent paid in Cash

Aug. 19

Supplies Expense $259 (debit)

Supplies 259 (credit)

Supplies Consumed during the month

Step-by-step explanation:

See the Journal Entries and Narrations that i have prepared.

Note

The decline in supplies balance is due to consumption during the month. This consumption is treated as an expense. Calculation of the Expense = $550 - $291 = $259.