Question

Quality Service Inc. has the following account balances in their Chart of accounts as at June 1, 2018: o Cash - $138,000 • Accounts receivable - $0 o Land - $30,000 o Building - $0 o Supplies - $0 • Salary expense - $0 Notes payable - $0 Accounts payable - $0 Quality, capital - $70,000 Service revenue - $98,000 Utilities - $0 The company also presented the following transactions for the month: June 1. Purchased supplies for $1000 on account June 4. Purchased a building for $62,100 cash June 6. Performed service for a client on account. $12,000 June 10. Borrowed $7.000 cash, signing a note payable June 13. Paid the liability from June 1 June 17. Sold for $15.000 land that had cost this same amount June 21. Received $8000 cash from June 6 transaction June 30. Paid utilities expense of $600 and salary expense $2.500

Answer 1

Credit Credit Amount Journal entries Accounts tittle Supplies Accounts payable Debit $ 1,000 Liabilities Current liabilities Note payable $ 1,000 Balance sheet Amount Assets Current Assets $ 7,000 Accounts receivables Cash Supplies $ 176,900 Non current assets Building Land $ 4,000 $ 101,800 $ 1,000 $ 62,100 Building Cash $ Trail balance Accounts tittle Debit Accounts receivables $ 4.000 Building $ 62,100 Cash $ 101.800 Land $ 15,000 Note payable Salaries expense $ 600 Service revenue Quality capital Supplies $ 1,000 Utilities $ 2,500 Grand Total $ 187,000 62,100 $ 7,000 Quality equity $ 62,100 $ 15,000 12,000 Accounts receivables $ Service revenue $ 110,000 $ 70,000 $ 12.000 $ 183,900 S183,900 $ 7,000 Cash Note payable $ 7,000 $ 187,000 | $ 1,000 Accounts payable Cash $ 1,000 Amount $ 110,000 $ 15,000 Cash Land I $ 15,000 Income statement Accounts tittle Amount Service revenue Less: Expenses Utilities $ 600 Salaries expense $ 2,500 Net income $ 8,000 Cash Accounts receivables $ (3,100) $ 106,900 $ 8,000 Salaries expense Utilities Cash $ $ 600 2,500 $ 3,100 Statement of owner's equity Accounts tittle Amount Quality capital, Beginning | $ 70,000 Add: Net income $ 106,900 Quality capital, Ending S176,900

Credit Rectification entries Accounts tittle Accounts payable Supplies Debit $ 90 (540-450) $ 90 $ 1,080 Cash Suspense account |(Since it is partially wrong entry suspense 1,080 |account needs to be used) $ 800 Accounts receivables $ Cash $ 800