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    Accounting entries to establish security alarm maintenance

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    For each Transaction, describe the event (including amounts) that caused the entry to be made. See attached file for the complete question.

    Jill and Phil have just established a security alarm maintenance service. They charge $20 per hour per person and are usually paid by check upon completion of the job. For certain customers, they send a bill immediately and are paid promptly by return mail. Their out-of-pocket expenses are rather low - usually only supplies and transportation. Following are the entries to the accounting system that were made for the first 12 transactions of the company.

    ( Balance Sheet Accounts ) (Income Statement Accounts)
    Account Cash + Other Assets = Liabilities + Equity +
    Revenues -Expenses
    A. Cash Investment by Owner 200 200
    B. Cash Supplies -115 115
    C. Cash Notes Payable 391 391
    D. Cash Supplies -80 80
    E. Cash Accounts Receivable Sales 390 160 550
    F. Cash Notes payable -300 -300
    G. Cash Accounts Receivable 100 100
    H. Supplies Expense -55 -55
    I. Supplies Expense -65 -65
    J. Cash Accounts Receivable Sales 575 150 725
    K. Cash Accounts Receivable 90 -90
    I. Cash Retained Earnings -800 -800

    For each Transaction, describe the event (including amounts that caused the entry to be made.

    © BrainMass Inc. brainmass.com December 24, 2021, 4:45 pm ad1c9bdddf
    https://brainmass.com/business/accounting/accounting-entries-establish-security-alarm-maintenance-5725

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    A) The Owners have invested in the business by providing cash = 200. They were issued equity for 200 against this investment of 200.
    B) Supplies were purchased for cash. Cash decreases by 115 and inventory increases by 115.
    C) Borrowings in form of notes payable to the tune of 391. Cash increases by 391 and liabilities in the form of notes payable increases by 391.
    D) Same as B) above Supplies were purchased for cash. Cash decreases by 80 and inventory increases by 80.
    E) Sales were made for 550. Cash sales were for 390 and remaining 160 was on credit. Cash increases by 390 and accounts receivable increases by 160.
    F) Notes payable were paid off to the extent of 300. Cash decreases by 300 and liabilities in the form of notes payable decreases by 300.
    G) Cash received from debtors. Cash increases by 100 and accounts receivable decreases by 100.
    H) Supplies were made from stock. Inventory decreases by 55. Recorded as expense of 55.
    I) Same as H) Supplies were made from stock. Inventory decreases by 65. Recorded as expense of 65.
    J) Same as E). Sales were made for 725. Cash sales were for 575 and remaining 150 was on credit. Cash increases by 575 and accounts receivable increases by 150.
    K) Same as G). Cash received from debtors. Cash increases by 90 and accounts receivable decreases by 90.
    L) Cash withdrawn from the business by the owners. Cash decreases by 800 and the owner's equity decreases by 800.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 4:45 pm ad1c9bdddf>
    https://brainmass.com/business/accounting/accounting-entries-establish-security-alarm-maintenance-5725

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