ahmadchaaban
Mar 9, 2011, 09:29 AM
At the beginning of April, Angela Brooke launched a custom computer programming company called Softworks. The company had the following transactions during April:
a.
Angela invested $75,000 cash, office equipment with a value of $6,000, and $25,000 of computer equipment in the company in exchange for common stock.
b.
Purchased land worth $27,500 for an office by paying $5,000 cash and signing a long-term note payable for the balance.
c.
Purchased a portable building with $30,000 cash and moved it onto the land acquired in b.
d.
Paid $7,500 cash for the premium on a three-year insurance policy.
e.
Provided services to a client and collected $5,400 cash.
f.
Purchased $5,000 of additional office equipment by paying $2,500 cash and
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signing a long-term note payable for the balance due.
g.
Completed $5,250 of services for a client on credit.
h.
Purchased $1,000 of additional office equipment from Yukon Office Supply on credit.
I.
Completed services for Johnson and Company for $10,200 on credit.
j.
Received a bill for $650 for rent of a piece of computer equipment used on a recently completed job. The bill is to be paid within 30 days.
k.
Received $5,100 from Johnson and Company for work completed in transaction I.
l.
Semi-Monthly payroll totalled $2,000 and was paid in cash.
m.
Paid $1,000 to Yukon Office Supply for office equipment purchased in transaction h.
n.
Paid $750 for minor repairs on computer equipment.
o.
Paid $1,800 cash for advertising.
p.
Semi-Monthly payroll totalled $2,000 and was paid in cash.
q.
Paid $5,000 cash for dividends.
Required
01. Open the relevant T accounts and record these transactions according to the double entry principles.
02. The investment that Angela made on office equipment in transaction 'a' was made on the 1st of April, and the second purchase of office equipment given in transaction 'f 'was made on the 15th of April. If the policy is to depreciate office equipment by 20% per year, calculate how much deprecation should be charged on the office equipment for the month of April. Record the calculated amounts in the appropriate T accounts.
03. Balance the accounts at the end of the month.
a.
Angela invested $75,000 cash, office equipment with a value of $6,000, and $25,000 of computer equipment in the company in exchange for common stock.
b.
Purchased land worth $27,500 for an office by paying $5,000 cash and signing a long-term note payable for the balance.
c.
Purchased a portable building with $30,000 cash and moved it onto the land acquired in b.
d.
Paid $7,500 cash for the premium on a three-year insurance policy.
e.
Provided services to a client and collected $5,400 cash.
f.
Purchased $5,000 of additional office equipment by paying $2,500 cash and
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signing a long-term note payable for the balance due.
g.
Completed $5,250 of services for a client on credit.
h.
Purchased $1,000 of additional office equipment from Yukon Office Supply on credit.
I.
Completed services for Johnson and Company for $10,200 on credit.
j.
Received a bill for $650 for rent of a piece of computer equipment used on a recently completed job. The bill is to be paid within 30 days.
k.
Received $5,100 from Johnson and Company for work completed in transaction I.
l.
Semi-Monthly payroll totalled $2,000 and was paid in cash.
m.
Paid $1,000 to Yukon Office Supply for office equipment purchased in transaction h.
n.
Paid $750 for minor repairs on computer equipment.
o.
Paid $1,800 cash for advertising.
p.
Semi-Monthly payroll totalled $2,000 and was paid in cash.
q.
Paid $5,000 cash for dividends.
Required
01. Open the relevant T accounts and record these transactions according to the double entry principles.
02. The investment that Angela made on office equipment in transaction 'a' was made on the 1st of April, and the second purchase of office equipment given in transaction 'f 'was made on the 15th of April. If the policy is to depreciate office equipment by 20% per year, calculate how much deprecation should be charged on the office equipment for the month of April. Record the calculated amounts in the appropriate T accounts.
03. Balance the accounts at the end of the month.