Quality Service Inc. has the following accounts balances in their charts of accounts balances as at June 1, 2020: Cash $138,000; Accounts receivable $0; Land $ 30,000; Building $0; Supplies $0; Accounts payable $0; Notes payable $0; Quality-capital $70,000; Service revenue $98,000; Utilities, salary expense $0. The company also presented the following transactions for the month: June 1. Purchased supplies for $1000 on account June 4. Purchased a building for, $62,100 cash June 6. Performed service for a client on account, $12,000 June 10. Borrowed $7,000 cash, signing a note payable June 13. Paid the liability from June 1 June 17. Sold for $15,000 land that had cost this same amount June 21. Received $8000 cash from June 10 transaction June 30. Paid utilities expense of $600 and salary expense $2,500 Requirements: State the effect each transaction from June 1st-30th will have on the accounting equation. For example, the transaction increased asset and increased capital; the transaction increased expenses and decreased cash; the transaction increased asset and decreased asset; etc. Prepare the journal entries with narrations to record the transactions for “June” Post the transactions recorded in your journal to their respective “T” accounts and balance off each account at June 30th, 2020. Having determined the account balances, represent this information using the accounting equation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Quality Service Inc. has the following accounts balances in their charts of accounts balances as at June 1, 2020:

Cash $138,000; Accounts receivable $0; Land $ 30,000; Building $0; Supplies $0; Accounts payable $0; Notes payable $0; Quality-capital $70,000; Service revenue $98,000; Utilities, salary expense $0.

The company also presented the following transactions for the month:

June 1. Purchased supplies for $1000 on account

June 4. Purchased a building for, $62,100 cash

June 6. Performed service for a client on account, $12,000

June 10. Borrowed $7,000 cash, signing a note payable

June 13. Paid the liability from June 1

June 17. Sold for $15,000 land that had cost this same amount

June 21. Received $8000 cash from June 10 transaction

June 30. Paid utilities expense of $600 and salary expense $2,500

Requirements:

State the effect each transaction from June 1^st-30^th will have on the accounting equation. For example, the transaction increased asset and increased capital; the transaction increased expenses and decreased cash; the transaction increased asset and decreased asset; etc.
Prepare the journal entries with narrations to record the transactions for “June”
Post the transactions recorded in your journal to their respective “T” accounts and balance off each account at June 30^th, 2020.
Having determined the account balances, represent this information using the accounting equation.

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