Question

1 Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company in exchange for common stock. 2 The company paid $2,100 cash for an insurance policy covering the next 24 months. 5 The company purchased office supplies for $880 cash. 20 The company received $3,331 cash in photography fees earned. 31 The company paid $675 cash for August utilities.

Answer 1

Answer:

Part A:

August 1:

Cash                                               $6,500

Photography equipment               $$33,500

Madison Harris Capital                                                          $40,000

August 2:

Prepaid Insurance                          $2,100

Cash                                                                                        $2,100

August 5:

Office Supplies                               $880

Cash                                                                                        $880

August 20:

Cash                                                 $3,331

Photography fees earned                                                      $3,331

August 31:

Utilities expense                              $675

Cash                                                                                         $675

Total                                                 $46,986                          $46,986  

Part B:

Amount                              Debit($)                Credit($)

Cash                                   6,176

Office Supplies                 880

Prepaid Insurance            2,100

Photography Equipment 33,500

M.Harris Capital                                                 40,000

Photography Fee earned                                  3,331

Utilities Expense                675

Total                                     43,331                     43,331

Explanation:

Journal Entries:

It helps the company or firm to put all its transactions ion one sheet as debit and credit to keep track of its financial transactions. At the end total debit is equal to total credit.

Below are journal entries of above Transactions:

Amount                                          Debit                                Credit

August 1:

Cash                                               $6,500

Photography equipment               $$33,500

Madison Harris Capital                                                          $40,000

August 2:

Prepaid Insurance                          $2,100

Cash                                                                                        $2,100

August 5:

Office Supplies                               $880

Cash                                                                                        $880

August 20:

Cash                                                 $3,331

Photography fees earned                                                      $3,331

August 31:

Utilities expense                              $675

Cash                                                                                         $675

Total                                                 $46,986                          $46,986  

Part B:

From Above Entries we can find the cash at the end:

Ending Cash=Total Debit Cash- Total Credit Cash

Ending Cash=(6,500+3,331)-(2,100+880+675)

Ending Cash=$6176

Preparing Trial Balance:

Amount                              Debit($)                Credit($)

Cash                                   6,176

Office Supplies                 880

Prepaid Insurance            2,100

Photography Equipment 33,500

M.Harris Capital                                                 40,000

Photography Fee earned                                  3,331

Utilities Expense                675

Total                                     43,331                     43,331