[yeehawmustang]

On August 1 2008, ken wade created a new house sitting agency. Wades watchdog Service. The following transactions occurred during the companys first month:

Aug 1 wade invested 15,000. Cash and computer equipment worth 2,500.00
Aug 3 purchased 350. Of office supplies for cash
Aug 24 collected 5,000.00 cash for house sitting services provided to customers
Aug 28 paid another 2200.00 cash for salaries.

I am having problem with these on where to put it all.. there are more but these are stumping me.

The companys chart of accounts included the following:
Cash
Accounts receivable
Office supplies
Prepaid insurance
Computer equipment
Accumulated depreciation-computer equipment
Salaries payable
K wade, capital
K wade withdrawals
Services fees earned
Salaries expense
Office supplies expense
Income summary


Please help! I try and try and I'm not balancing at the end!

[dek0014]

Hello,

Well, for starters! When he invests the cash and computer equipment into his company, Mr. Wade is increasing both his assets and his capital.

Remember, Assets = Liabilities + Capital/Equity

So your first transaction would look something like this:

Debit) Cash 15,000
Debit) Computer Equipment 2,500
Credit) K. Wade, Capital (15,000 + 2,500) = 17,500


For the next transaction, Mr. Wade is now buying supplies for his company and paying for them with the company's cash supply.

Debit) Office Supplies 350
Credit) Cash 350


Mr. Wade has to pay his employees! They aren't going to house-sit for free!

Debit) Salaries Expense 2,200
Credit) Cash 2,200

If the salaries have already been accrued (Meaning you did an entry that debited Salaries Expense and credit Salaries Payable), then you would do this!

Salaries Payable 2,200
Cash 2,200


I hope that helps!