Question

Consider the following transactions for Mittel Corporation:
Issue common stock for $14,000.
Purchase equipment for $11,400 cash.
Pay employees’ salaries of $3,900.
Provide services to customers for $6,500 cash.
Required:
1. Post these transactions to the cash T-account. Assume the balance of cash before these transactions is $4,000.

Answer 1

Explanation:

The preparation of the Cash T-account is presented below:

                                        Cash Account

Particulars               Amount           Particulars                   Amount

Beginning balance $4,000            Equipment                    $11,400

Common stock       $14,000          Salaries expense          $3,900

Service revenue     $6,500           Ending balance             $9,200

                                                        (Balancing figure)

Total                        $24,500          Total                             $24,500