A company provides services to customers on account for $2,400. Indicate the amount of increases and…
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Question “A company provides services to customers on account for $2,400. Indicate the amount of increases and…”
company provides services to customers on account for $2,400.
Indicate the amount of increases and decreases in the accounting
equation.
Answer
1. Journal entries for recording of the transactions :-
Date | particulars | Debit ($) | credit($) |
April 1 | cash a/c | 50000 | |
To note payable a/c | 50000 | ||
(Being signed note payable and received cash) | |||
April 2 | cash a/c | 20000 | |
To common stock a/c | 20000 | ||
(Being common stock issued per cash) | |||
April 7 | equipment a/c | 40000 | |
To cash a/c | 40000 | ||
(Being equipment purchased with cash) | |||
April 10 | supplies a/c | 4000 | |
To accounts payable a/c | 4000 | ||
(being supplies purchased on account) | |||
April 12 | cash a/c | 5000 | |
To service revenue | 5000 | ||
(Bank cash received for services rendered) | |||
April 16 | salaries expense a/c | 1200 | |
To cash a/c | 1200 | ||
(Being salaries paid to employees) | |||
April 19 | advertising expense a/c | 500 | |
To cash | 500 | ||
(being advertising expenses paid) | |||
April 23 | accounts receivable a/c | 7000 | |
To service revenue a/c | 7000 | ||
(Being services rendered on account) | |||
April 29 | salaries expense a/c | 1500 | |
To cash | 1500 | ||
(Being salaries paid to employees) | |||
April 30 | utilities expenses a/c | 1200 | |
To Cash a/c | 1200 | ||
(Being utilities bill paid) | |||
April 30 | dividend a/c | 700 | |
To cash a/c | 700 | ||
(Being dividend paid to common stockholders) |
2. T accounts
Date | Particulars | Amount ($) | Date | Particulars | Amount ($) |
Cash account | |||||
April 1 | to note payable | 50000 | April 7 | by equipment | 40000 |
April 2 | to common stock | 20000 | April 16 | by salaries | 1200 |
April 12 | To service revenue | 5000 | April 19 | by advertisement expenses | 500 |
April 29 | by salaries | 1500 | |||
April 30 | by utilities expenses | 1200 | |||
April 30 | by dividend | 700 | |||
April 30 | by balance c/d | 29900 | |||
75000 | 75000 | ||||
Note payable account | |||||
April 30 | to balance c/d | 50,000 | April 1 | by cash | 50,000 |
50,000 | 50,000 | ||||
Equipment account | |||||
April 7 | to cash | 40000 | April 30 | by balance c/d | 40000 |
40000 | 40000 | ||||
Common stock account | |||||
April 30 | To balance c/d | 20000 | April 2 | by cash | 20000 |
20000 | 20000 | ||||
Supplies account | |||||
April 10 | to accounts payable | 4000 | April 30 | by balance c/d | 4000 |
4000 | 4000 | ||||
Accounts payable account | |||||
April 30 | by balance c/d | 4000 | April 10 | by supplies | 4000 |
4000 | 4000 | ||||
Service revenue account | |||||
April 30 | by balance c/d | 12000 | April 12 | by cash | 5000 |
April 23 | accounts receivable | 7000 | |||
12000 | 12000 | ||||
Salaries account | |||||
April 16 | to cash | 1200 | April 30 | by balance c/d | 2700 |
April 29 | to cash | 1500 | |||
2700 | 2700 | ||||
Advertisement expenses account | |||||
April 19 | To cash | 500 | April 30 | by balance c/d | 500 |
500 | 500 | ||||
Account receivable account | |||||
April 23 | to service revenue | 7000 | April 30 | by balance c/d | 7000 |
7000 | 7000 | ||||
Utilities expenses account | |||||
April 30 | to cash | 1200 | April 30 | by balance c/d | 1200 |
1200 | 1200 | ||||
Dividends account | |||||
April 30 | to cash | 700 | April 30 | by balance c/d | 700 |
700 | 700 | ||||
3. Account balances of each account
Account | Balance |
Cash | 29900 |
Note payable | 50000 |
Equipment | 40000 |
Common stock | 20000 |
Supplies | 4000 |
Accounts payable | 4000 |
Service revenue | 12000 |
Salaries | 2700 |
Advertisement expenses | 500 |
Accounts receivable | 7000 |
Utilities | 1200 |
Dividends | 700 |
4. Trial balance for the month of June. Particulars
Particulars | amount ($) | particulars | Amount ($) |
Cash | 29900 | note payable | 50,000 |
Equipment | 40000 | Common stock | 20000 |
Account receivables | 7000 | Service revenue | 12000 |
Dividends | 700 | Accounts payable | 4000 |
Salaries | 2700 | ||
Supplies | 4000 | ||
Utilities | 1200 | ||
Advertisement expenses | 500 | ||
86000 | 86000 |
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