Mary Ann Powers decided to go into business as a sole proprietor and established
ID: 2484213 • Letter: M
Question
Mary Ann Powers decided to go into business as a sole proprietor and established MAP Computer Consulting Services on October 01, 2010. Listed below are accounts to use for transactions (chart of accounts). Following this list are the transactions that occurred during the first month of operations. For each transaction, you are to indicate the accounts that should be debited and credited in the appropriate box.
Chart of Accounts
Cash
Accounts Receivable
Supplies
Accounts Payable
Mary Ann Powers, Capital
Mary Ann Powers, Drawing
Fees Earned
Rent Expense
Salaries Expense
Automobile Expense
Supplies Expense
Miscellaneous Expense
10/01 She opened a business checking account (bank) with a deposit of $25,000 from her personal account.
10/02 She purchased computer supplies for $1,500, paying for all of it by check from the business checking account.
10/03 She provided services to ABC Inc. and received payment of $795 for services rendered.
10/05 She paid rent for the company’s office space for the month, $900.
10/10 She paid office salaries, $2,100.
10/11 She billed customers for services provided on account ($17,000).
10/15 She purchased computer supplies for $3,000, paying $750 in cash and the rest on account.
10/16 She paid automobile expenses of $250 and miscellaneous expenses of $100.
10/20 She paid creditors on the account ($500).
10/25 She received a cash payment of $5,000 from customers previously billed (on account).
10/31 She determined the cost of supplies available on hand at the end of the month is $2,500; therefore, the cost of supplies used was $2,000.
10/31 Mary Ann Powers withdrew cash for personal use ($1,000).
Instructions:
For each transaction, indicate the accounts that should be debited and credited in the appropriate box using the form provided.
Chart of Accounts
Cash
Accounts Receivable
Supplies
Accounts Payable
Mary Ann Powers, Capital
Mary Ann Powers, Drawing
Fees Earned
Rent Expense
Salaries Expense
Automobile Expense
Supplies Expense
Miscellaneous Expense
Explanation / Answer
Debit Credit 10/01 She opened a business checking account (bank) with a deposit of $25,000 from her personal account. Cash Mary Ann Powers Capital 10/02 She purchased computer supplies for $1,500, paying for all of it by check from the business checking account. Supplies Cash 10/03 She provided services to ABC Inc. and received payment of $795 for services rendered. Cash Fees earned 10/05 She paid rent for the company’s office space for the month, $900. Rent expense Cash 10/10 She paid office salaries, $2,100. Salaries expense Cash 10/11 She billed customers for services provided on account ($17,000). Accounts receivable Fees earned 10/15 She purchased computer supplies for $3,000, paying $750 in cash and the rest on account. Supplies Cash 750, Accounts Payable-2250 10/16 She paid automobile expenses of $250 and miscellaneous expenses of $100. Automobile expense Cash Miscellaneous expense 10/20 She paid creditors on the account ($500). Accounts payable Cash 10/25 She received a cash payment of $5,000 from customers previously billed (on account). Cash Accounts Receivable 10/31 She determined the cost of supplies available on hand at the end of the month is $2,500; the Supplies expense Supplies therefore, the cost of supplies used was $2,000. 10/31 Mary Ann Powers withdrew cash for personal use ($1,000). Mary Ann Powers, Drawing Cash