WHAT IS THE INCOME STATEMENT FOR THE FOLLOWING During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $60,000, in exchange for 6,000 shares of $10 par value common stock. July 3 Paid the current month's rent, $3,500 July 5 Paid the premium on a 1-year insurance policy, $4,200 July 7 Purchased supplies on account from Little Company, $1,000. July 10 Paid employee salaries, $3,500 July 14 Purchased equipment from Lake Company, $10,000. Paid $2,500 down and the balance was placed on account. Payments will be $500.00 per month until the equipment is paid. The first payment is due 8/1. Note: Use accounts payable for the balance due. July 15 Received cash for preparing tax returns for the first half of July, $8,000 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for preparing tax returns for the last half of July, $9,000 July 31 Declared and paid cash dividends of $600.
WHAT IS THE INCOME STATEMENT FOR THE FOLLOWING
During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation,
completed the following transactions.
July 1 Began business by making a deposit in a company bank account of $60,000, in exchange
for 6,000 shares of $10 par value common stock.
July 3 Paid the current month's rent, $3,500
July 5 Paid the premium on a 1-year insurance policy, $4,200
July 7 Purchased supplies on account from Little Company, $1,000.
July 10 Paid employee salaries, $3,500
July 14 Purchased equipment from Lake Company, $10,000. Paid $2,500 down and the balance was
placed on account. Payments will be $500.00 per month until the equipment is paid. The first payment is due 8/1.
Note: Use accounts payable for the balance due.
July 15 Received cash for preparing tax returns for the first half of July, $8,000
July 19 Made payment on account to Lake Company, $500.
July 31 Received cash for preparing tax returns for the last half of July, $9,000
July 31 Declared and paid cash dividends of $600.
Prepare
General Journal Chart of Accounts: Account Title (Normal Balance)
Date Description(Account Name) Debit Credit
Assets
Cash (Debit)
Prepaid Insurance (Debit)
Supplies (Debit)
Equipment (Debit)
Accumulated Depreciation - Equipment (Credit)
Liabilities
Accounts Payable (Credit)
Income Tax Payable (Credit)
Common Stock (Credit)
Dividends (Debit)
Revenue
Tax Preparation Revenue (Credit)
Expenses
Rent Expense (Debit)
Salaries Expense (Debit)
Insurance Expense (Debit)
Supplies Expense (Debit)
Depreciation Expense (Debit)
Income Tax Expense (Debit)
Clearning Account
Income Summary
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
