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    Cash Balance Column Accounts and "Account Receivable"

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    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.

    Additional information:

    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.

    Required "

    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

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    Solution Preview

    Dear student,
    I providing the solution as per the message you sent in reply to my message.Beginning balances of accounts are assumed as follows.
    Cash $40000
    Account Receivable $15000
    Supplies $5000
    Account payable ...

    Solution Summary

    The cash balance column accounts and account receivables are examined.