Question

to prepare an income statement, balence sheet and a trial balanece

CASES • Recording and Posting Transactions (LO 3.3 &- 3.4) The following transactions took place during the first two weeks of operations of Not So Taxing, Inc., a walk-in tax preparation service. Mar. 2 Mar. 3 Mar. 4 Mar. 5 Mar. 6 Issued common stock of the corporation in exchange for $200,000 cash. Purchased $4,000 of supplies on account from Kidd Supply Company. Paid $3,000 of office rent for March. Completed tax work for Mr. East and billed him $650. Received a total of $7,400 from customers for services provided during the week. Received a $1,000 advance from Mr. West for tax services that have not yet been provided. Placed a telephone order for a $550 laser printer. Paid $1,200 to Kidd Supply Company. Received $450 from Mr. East. Paid an employee $790 for two weeks work. Received $3,700 cash from customers for ser- vices provided during the week. Mar. 9 Mar. 10 Mar. 11 Mar. 12 Mar. 13 Mar. 13 Required:

Answer 1

Not So Taxing, Inc. Journal entries Date Account 2-Mar Cash Common Stock Debit $ 200,000 $ 200,000 $ 4,000 3-Mar Supplies Accounts Payable $ 4,000 $ 3,000 4-Mar Rent expense Cash $ 3,000 $ 650 5-Mar Accounts Receivable Service Revenue $ 650 $ 7,400 6-Mar Cash Service Revenue $ 7,400 $ 1,000 9-Mar Cash Unearned Revenue $ 1,000 10-Mar No entry As its just an order yet $ 1,200 11-Mar Accounts Payable Cash $ 1,200 $ 450 12-Mar Cash Accounts Receivable $ 450 $ 790 13-Mar Salaries expense Cash $ 790 $ 3,700 13-Mar Cash Service Revenue $ 3,700

Credit Not So Taxing, Inc. T Accounts Date Debit Date Credit Cash 2-Mar $ 200,000 4-Mar $ 3,000 6-Mar $ 7,400 11-Mar $ 1,200 9-Mar $ 1,000 13-Mar $ 790 12-Mar $ 450 13-Mar $ 3,700 Date Debit Date Credit Accounts Receivable 5-Mar $ 650 12-Mar $ 450 Date Debit Date Supplies 3-Mar $ 4,000 Bal. Bal. Bal. $ 207,560 Accounts Payable 11-Mar $ 1,200 3-Mar $ 4,000 $ 200 Unearned Revenue 9-Mar $ 1,000 $ 4,000 Common Stock 2-Mar $ 200,000 $ 1,000 $ 200,000 Bal. $ 2,800 Service Revenue 5-Mar $ 650 6-Mar $ 7,400 13-Mar $ 3,700 Bal. Rent expense 4-Mar $ 3,000 Bal. Salaries expense 13-Mar $ 790 Bal. $ 11,750 Bal. $ 3,000 Bal. $ 790

Unadjusted TB Debit Credit 207,560 200 4,000 Not So Taxing, Inc. Account Names Cash Accounts Receivable Supplies Accounts Payable Unearned Revenue Common Stock Service Revenue Rent expense Salaries expense Totals 2,800 1,000 200,000 11,750 3,000 790 215,550 215,550

11,750 Not So Taxing, Inc. Income Statement For the Month Ended March 31 Revenues Service Revenue Expenses Rent expense Salaries expense Total Expenses Net Income 3,000 790 3,790 7,960 Statement of Retained Earnings For the Month Ended March 31 Beginning balance Net Income Less Dividends Ending Balance 7,960 7,960

Not So Taxing, Inc. Balance Sheet As of March 31 Assets Current Assets Cash Accounts Receivable Supplies Liabilities & Stockholders Equity Current Liabilities 207,560 Accounts Payable 200 Unearned Revenue 4,000 Total Current Liabilities 2,800 1,000 3,800 Stockholders Equity Common Stock Retained earnings Total Stockholders Equity 200,000 7,960 207,960 Total Assets 211,760 Total Liabilities & Stockholders Equity 211,760