Question

Bearcat Construction begins operations in March and has the following transactions.

Answer 1

Answer:

Mar 1    Cash                         15000 Dr

                  Common Stock       15000 Cr

Mar 5   Cash                          7800 Dr

                Note Payable               7800 Cr

Mar 10  Equipment Account                 19000 Dr

                     Cash                                      19000 Cr

Mar 15  Advertising expense                       1000 Dr

                      Cash                                             1000 Cr

Mar 22  Accounts Receivables                   16800 Dr

                    Service Revenue                           16800 Cr

Mar 27  Cash                                11800 Dr

                 Accounts Receivable      11800 Cr

Mar 28  Salaries Expense                   4800 Dr

                    Cash                                      4800 Cr

Explanation:

Mar 1 The issuance of common stock will bring in cash so cash account will be debited and common stock, which is capital, will be credited.

Mar 5 The notes signed is a liability and will be credited as liability increases and the cash received will be debited.

Mar 10 The purchase of equipment against cash is an increase in equipment which is an asset so it will be debited and cash will be credited

Mar 15 The advertising is an expense and as it is increasing it will be debited and cash will be credited.

Mar 22 The provision of services on account will increase accounts receivable and service revenue. The revenue will be credited and receivables, which are asset will be debited.

Mar 27 The receipt of cash against receivables will be debited as cash increases and credited in receivables account.

Mar 28 The payment of salaries is an expense.