Question

Below are the transactions for Ute Sewing Shop for March, the first month of operations.
March 1 Issue common stock in exchange for cash of $1,700.
March 3 Purchase sewing equipment by signing a note with the local bank, $1,400.
March 5 Pay rent of $470 for March.
March 7
Martha, a customer, places an order for alterations to several dresses. Ute estimates that the alterations will cost Martha $670. Martha is not required to pay for the alterations until the work is complete.

March 12
Purchase sewing supplies for $117 on account. This material will be used to provide services to customers.

March 15 Ute delivers altered dresses to Martha and receives $670.
March 19
Ute agrees to alter 10 business suits for Bob, who has lost a significant amount of weight recently. Ute receives $570 from Bob and promises the suits to be completed by March 25.

March 25 Ute delivers 10 altered business suits to Bob.
March 30 Pay utilities of $82 for the current period.
March 31 Pay dividends of $85 to stockholder

1. Record each transaction

2. Post each transaction to the appropriate T-accounts

3. Prepare a trial balance as of March 31.

Answer 1

Answer:

Explanation:

March 1

Cash  1700

    Share Capital 1700

To record the issuance of shares

March 3

Equipment 1400

  Cash           1400

To record the purchase of equipment on cash

March 5

Rent Expense 470

    Cash               470

To record the rent expense

March 7

No entry neither cash nor serves are provided.

March 12

Purchase 117

  Cash           117

To record the purchases

March 15

Cash 670

 Income 670

To record the services Income.

March 19

Advance 570

     Payable   570

To record the advance cash receipt for services not yet provided thus advance is our liability.

March 25

Payable 228    570/25*10

   Income    228

To record the services income against advance given.

March 30

Utilities Expense   82

    Cash                      82

To record the monthly utilities expense

March 31

Dividend Pay  85

       Cash              85  

To record the payment of dividend.

2)

                                Share Capital Account

                                                 Opening =    0

                                                   Cash          1700

          Closing=1700                                            

 

                                     Cash  Account

Opening = 0

share capital   1700                              Equipment          1400

                                                               Rent                   470

                                                                Purchase           117

Income             670

Adv. Pay           570

                                                                  Utilities             82

                                                                   Dividend          85

                                                                   Closing balance- 786    

     

                                       Equipment

Opening = 0

Cash           1400

                                                             Closing-1400

                                       Rent Expense

Opening = 0

Cash           470

                                                             Closing-470

                                       Purchase Expense

Opening = 0

Cash           117

                                                             Closing-117

                                Income Account

                                                 Opening =    0

                                                   Cash          670

                                                    Payable     228

      Closing- 898                                                                      

                                Payable Account

                                                             Opening =    0

                                                             Cash          570

Income 282

Closing-342                                                                      

                                       Utilities Expense

Opening = 0

Cash           82

                                                             Closing-82

                                   Dividend

Opening = 0

Cash           85

                                                             Closing-85

3)                     Trail Balance

     Head Of Account                           Debit                    Credir

Cash                                   786  

Share Capital                                           1700

Equipment                           1400  

Rent Expense                                                   470  

Purchases                            117  

Income                                                           898

Payable                             342

Utilities                                     82  

Dividend                                            85  

Total                                   2940                 2940