During the first month of operations, October 2017, Barron Environmental Services Inc. completed the following transac
During the first month of operations, October 2017, Barron Environmental Services
Inc. completed the following transactions:
Oct. 3 Received $20,000 cash, and issued common shares.
4 Performed services for a client, and received $5,000 cash.
6 Purchased supplies, $300, and furniture, $2,500, on account.
7 Paid $15,000 cash to acquire land for an office site.
7 Worked for a client, and billed the client $1,500.
16 Received partial payment from a client on account, $500.
24 Paid the telephone bill, $110.
24 Paid the water and electricity bills, $400.
28 Received $2,500 cash for helping a client meet environmental standards.
31 Paid secretary's salary, $1,200.
31 Paid $2,500 of the account payable created on October 6.
31 Declared and paid dividends of $2,400.
Set up the following T-accounts: Cash, Accounts Receivable, Supplies, Furniture, Land, Accounts Payable, Share Capital, Dividends, Service Revenue, Salary Expense, and Utilities Expense.
1. Record each transaction in the journal, using the account titles given. Key each transaction by date. Explanations are not required.
2. Post the transactions to the T-accounts, using transaction dates as posting references. Label the ending balance of each account Bal., as shown in the chapter.
3. Prepare the trial balance of Barron Environmental Services Inc. at October 31, 2017.
4. Report to the shareholder how much in total resources the business has to work with, how much it owes, and whether October was profitable (and by how much).