Question

Problem 2-03A a-c Sheffield Services was formed on May 1, 2020. The owing transactions took place during the first month. Transactions on May 1: 1. Jay Bradford invested $41,000 cash in the company, as its sole owner. 2. Hired two employees to work in the warehouse. They will each be paid a salary of $2,900 per month 3. Signed a 2-year rental agreement on a warehouse; paid $25,000 cash in advance for the first year. 4. Purchased furniture and equipment costing $30,000. A cash payment of $12,000 was made immediately, the remainder will be paid in 6 months. 5. Paid $2,000 cash for a one-year insurance policy on the furniture and equipment. Transactions during the remainder of the month: 6. Purchased basic office supplies for $600 cash. 7. Purchased more office supplies for $1.300 on account. 8. Total revenues earned were $18,000-$7,000 cash and $11,000 on account. 9. Paid $300 to suppliers for accounts payable due. 10. Received $3,300 from customers in payment of accounts receivable 11. Received utility bills in the amount of $500, to be paid next month. 12. Paid the monthly salaries of the two employees, totaling $5,800.

Answer 1

NO	Accounts Titles	Debit	Credit
1)	Cash	$ 41,000
	Owner's capital		$ 41,000
	( To record jay bradford invested cash in business)
2)	No entry
	No entry
	( To hire 2 employees to work in warehouse )
3)	Prepaid rent	$ 25,000
	Cash		$ 25,000
	( To record Rent paid in advance for warehouse)
4)	Equipment	$ 30,000
	Cash		$ 12,000
	Accounts payable(30,000 -12,000)		$ 18,000
	(To record purchase of furniture and equipment)
5)	Prepaid insurance	$ 2,000
	Cash		$ 2,000
	(To record prepaid insurance for 1 year )
6)	Supplies	$ 600
	Cash		$ 600
	( To record purchase basic supplies for 600 )
7)	Supplies	$ 1,300
	Accounts payable		$ 1,300
	( To record purchase more supplies for credit )
8)	Accounts receivable	$ 11,000
	Cash	$ 7,000
	Service revenue		$ 18,000
	( To record total revenue earned )
9)	Accounts payable	$ 300
	Cash		$ 300
	(To record paid to supplier for account payable due )
10)	Cash	$ 3,300
	Accounts receivable		$ 3,300
	( to record cash received from customers in payment of accounts receivable )
11)	Utilities expense	$ 500
	Accounts payable		$ 500
	(to record utilities expense )
12)	Salaries and wages expense	$ 5,800
	Cash		$ 5,800
	( To record salaries paid to 2 employees)

CASH
1)	$ 41,000	3)	$ 25,000
8)	$ 7,000	4)	$ 12,000
10)	$ 3,300	5)	$ 2,000
		6)	$ 600
		9)	$ 300
		12)	$ 5,800
End.Bal.	$ 5,600
Accounts Receivable
8)	$ 11,000	10)	$ 3,300
End.Bal.	$ 7,700
Supplies
6)	$ 600
7)	$ 1,300
End.Bal.	$ 1,900
Prepaid insurance
5)	$ 2,000
End.Bal.	$ 2,000
Prepaid Rent
3)	$ 25,000
End.Bal.	$ 25,000
Equipment
4)	$ 30,000
End.Bal.	$ 30,000
Accounts payable
9)	$ 300	4)	$ 18,000
		7)	$ 1,300
		11)	$ 500
		End.Bal.	$ 19,500
Owner's Capital
		1)	$ 41,000
		End.Bal.	$ 41,000
Service Revenue
		8)	$ 18,000
		End.Bal.	$ 18,000
Salaries and Wages expense
12)	$ 5,800
End.Bal.	$ 5,800
Utilities Expense
11)	$ 500
End.Bal.	$ 500