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a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $80,000 in cash along with equipment having a $40,000 value

b. On May 21, Elegant Lawns purchases office supplies on credit for $480.

c. On May 25, Elegant Lawns receives $8,800 cash for performing landscaping services

d. On May 30. Elegant Lawns receives $2,000 cash in advance of providing landscaping services to a customer

For each transaction, (1 analyze the transaction using the accounting equation, (2) record the transaction in journal entry form, and (3) post the entry using T-accounts to represent ledger accounts. Use the following (partial) chart of accounts-account numbers parentheses: Cash (101); Accounts Receivable (106): Office Supplies (124): Trucks (153): Equipment (167), Accounts Payable (201 Unearned Landscaping Revenue (236) D. Tyler. Capital (301), D. Tyler, Withdrawals (302; Landscaping Revenue (403), Wages Expense (601), and Landscaping Expense (696)

Respuesta :

anthougo

Answer:

Elegant Lawns Company

1) Analysis of Transactions using the Accounting Equation:

Assets = Liabilities + Equity:

a) Assets (Cash $80,000) and (Equipment $40,000) increased = Liabilities + Equity ($120,000) increased.

b) Assets (Supplies $480) increased = Liabilities (Accounts Payable $480) increased + Equity

c) Assets (Cash $8,800) increased = Liabilities + Equity (Retained Earnings $8,800) increased

d) Assets (CVash $2,000) increased = Liabilities (Deferred Revenue $2,000) increased + Equity

2) Journal Entries:

                                                   Debit                 Credit

a) Cash                                    $80,000

   Equipment                          $40,000

   Equity                                                              $120,000

To record equity in cash and equipment

b) Office Supplies                    $480

   Accounts Payable                                           $480

To record purchase of office supplies on credit

c) Cash                                   $8,800

   Revenue                                                         $8,800

To record cash receipts from customers

d) Cash                                  $2,000

     Deferred Revenue                                     $2,000

To record cash receipt in advance for services to a customer

3) T-Accounts Ledger:

                                           Cash Account

                                          Debit ($)                                              Credit ($)

a) Equity                              80,000      Balance c/d                        90,800

c) Revenue                            8,800

d) Deferred Revenue           2,000                                                  00000

                                          90,800                                                 90,800

   Balance b/d                    90,800

                                          Equipment Account

                                          Debit ($)                                              Credit ($)

a) Equity                              40,000

                                          Equity Account

                                          Debit ($)                                              Credit ($)

   Balance c/d                   120,000      a) Cash                                80,000

                                          000000     a) Equipment                       40,000

                                          120,000                                                120,000

                                                                Balance b/d                    120,000

                                         Office Supplies Account

                                          Debit ($)                                              Credit ($)

b) Accounts Payable           480

                                         Accounts Payable Account

                                          Debit ($)                                              Credit ($)

                                                           b) Office Supplies                    480

                                   Revenue Account

                                          Debit ($)                                              Credit ($)

                                                           c) Cash                                   8,800

                                 Deferred Revenue Account

                                          Debit ($)                                              Credit ($)

                                                           d) Cash                                   2,000

Explanation:

a) The accounting equation states that Assets are equal to Liabilities plus Equity for every given business transaction.  Each transaction affects either the two sides of the equation equally or increases and decreases one side only.  This equation means that the two sides must be in balance given any transaction.  For example, the purchase of goods on credit will increase Inventory and increase Liabilities by the same amount.

b) Journal Entries are used to initially record or recognize business transactions.  The entries show which accounts will be debited and which will be credited in the Ledger.

c) T-Accounts is accounting tool which shows the ledger account to be debited and credited and to balance the account at the end of a period.  It is from the ledger that a trial balance is extracted before adjustments are made for the preparation of financial statements.

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