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Selected transactions for Therow Corporation during its first month in business are presented below.

Sept. 1 Issued common stock in exchange for $20,000 cash received from investors.
5 Purchased equipment for $9,000, paying $3,000 in cash and the balance on account.
8 Performed services on account for $18,000.
14 Paid salaries of $1,200.
25 Paid $4,000 cash on balance owed for equipment.
30 Paid $500 cash dividend.

Required:
a. Prepare a tabular analysis of the transactions.
b. Journalize the transactions. Do not provide explanations.
c. Post the transactions to T-accounts.

Respuesta :

anthougo

Answer:

Therow Corporation

a) Tabular Analysis of Transactions:

Assets                      =       Liabilities              +       Equity

1. Cash $20,000      =                                     +      Common Stock $20,000

2. Cash -$3,000

Equipment $9,000  =      $6,000

3. Accounts

Receivable $18,000 =                                     +    Retained Earnings $18,000

4. Cash -$1,200                                               +    Retained Earnings -$1,200

5. Cash -$4,000             -$4,000

6. Cash -$500                                                 +    Retained Earnings -$500

b. Sept. 1:

Debit Cash $20,000

Credit Common Stock $20,000

Sept. 5:

Debit Equipment $9,000

Credit Cash $3,000

Credit Accounts Payable $6,000

Sept. 8:

Debit Accounts Receivable $18,000

Credit Service Revenue $18,000

Sept. 14:

Debit Salaries Expense $1,200

Credit Cash $1,200

Sept. 25:

Debit Accounts Payable $4,000

Credit Cash $4,000

Sept. 30:

Debit Dividends $500

Credit Cash $500

c. T-accounts:

Cash

Account Titles       Debit     Credit

Common Stock  $20,000

Equipment                          $3,000

Salaries Expense                  1,200

Accounts payable                4,000

Dividends                                500

Accounts Receivable

Account Titles       Debit     Credit

Service Revenue $18,000

Common Stock

Account Titles       Debit     Credit

Cash                                   $20,000

Equipment

Account Titles       Debit     Credit

Cash                     $3,000

Accounts payable 6,000

Accounts Payable

Account Titles       Debit     Credit

Equipment                        $6,000

Cash                    $4,000

Service Revenue

Account Titles       Debit     Credit

Accounts receivable         $18,000

Salaries Expense

Account Titles       Debit     Credit

Cash                     $1,200

Dividends

Account Titles       Debit     Credit

Cash                      $500

Explanation:

a) Data and Analysis:

Sept. 1: Cash $20,000 Common Stock $20,000

Sept. 5: Equipment $9,000 Cash $3,000 Accounts Payable $6,000

Sept. 8: Accounts Receivable $18,000 Service Revenue $18,000

Sept. 14: Salaries Expense $1,200 Cash $1,200

Sept. 25: Accounts Payable $4,000 Cash $4,000

Sept. 30: Dividends $500 Cash $500

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