ABD Co. began operating on January 1st, 2006. on December 31st, 2006 the company records showed the following account balance :
The following transactions occurred during 2006 :
1- Collected $7,000 from Accounts Receivable.
2- Purchased supplies of $5,000 in cash.
3- Purchased equipment for $5,000 with cash. The equipment has an expected life of 4 years and expected salvage value of $1,000.
4- Paid the salaries payable of $1,000.
5- Paid rent expenses of $6,000.
6- The owner drew $2,000 cash for personal uses.
7- Paid salaries expenses of $3,000.
8- Paid $4,000 of Accounts payable.
9- A count of the supplies revealed that $5500 remained on Hand at year-end.
10- The rent expenses paid in transaction No.3 are related to two years ended by 31st of December 2008.
1) Prepare the Journal Entries.
2) Post them into Only "Cash" balance column Accounts and "Account receivable" & "Account Payable" T-Accounts.
3) Prepare the adjusting entries.
4) Prepare the "Income Statement" and the "Balance Sheet" for 2006
I providing the solution as per the message you sent in reply to my message.Beginning balances of accounts are assumed as follows.
Account Receivable $15000
Account payable ...
The cash balance column accounts and account receivables are examined.