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Utilizing "T" Accounts

Need help with setting up a "T" account...
also see attachment.....

1) Betty and her friend each invested $50,000 in cash (for a total of $100,000) in exchange for shares of common stock in Bobbie's Book Store.

2) On January 1, 2005, purchased new equipment for cash costing $70,000

3) Depreciation on the new equipment during 2005 was $800

4) Paid cash for rent expense of $45,000.

5) Purchase a small lot next to the store for $20,000. Paid cash for $5,000 and took out a loan for the remainder.

6) During 2005, customers purchased $300,000 of books. Of that amount $250,000 has been collected from customers
in cash and the remaining amounts are yet to be collected (an account receivable).

7) Inventory purchases totaled $200,000 for the year. All purchases were paid for in cash.

8) Interest due on the loan in (5) is $100 and is due but not yet paid.

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Need help with setting up a "T" account...
also see attachment.....

1) Betty and her friend each invested $50,000 in cash (for a total of $100,000) in exchange for shares of common stock in Bobbie's Book Store.

2) On January 1, ...

Solution Summary

This explains the prepration of "T" Account. The depreciation on the new equipment during 2005 is determined.

$2.19