FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Kochi Service was formed on May 1,2020. The following transactions took place during the first month (amounts in thousands)
Transactions on May 1:
- Rahul Shah invested ₤40,000 cash in the company in exchange for ordinary shares.
- Hired two employees to work in the warehouse. They will each paid a salary of ₤3,050 per month.
- Signed a 2-year rental agreement on a warehouse; paid ₤24,000 cash in advance for the first year
- Purchase furniture and equipment costing ₤30,000. A cash payment of ₤10,000 was immediately; the remainder will be paid in 6 months.
- Paid ₤1,800 cash for a one-year insurance policy on the furniture and equipment
Transactions during the remainder of the month:
- Purchased basic office supplies for ₤420 cash.
- Purchased more office supplies for ₤1,500 on account.
- Total revenues earned were ₤20,000
- ₤8,000 cash and ₤12,000 on account
- Paid ₤400 to suppliers for accounts payable due.
- Received ₤3,000 from customers in payment of
accounts receivable . - Received utility bills in the amount of ₤380, to be paid next month.
- Paid the monthly salaries of the two employees, totaling ₤6,100
Instructions
- Prepare
journal entries to record each of the events listed. (Omit explanations.) Post the journal entries to T-accounts.- Prepare a
trial balance as of May 31, 2020
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