Browns Travel Agency Accounting Problems Worksheet

Description

Question 1

On April 1, ElizabethBrown established Browns Travel Agency. The following transactions were completed during the month.

1.Invested $13,000 cash to start the agency.2.Paid $600 cash for April office rent.3.Purchased equipment for $3,400 cash.4.Incurred $800 of advertising costs in the Chicago Tribune, on account.5.Paid $700 cash for office supplies.6.Performed services worth $10,000: $3,000 cash is received from customers, and the balance of $7,000 is billed to customers on account.7.Withdrew $500 cash for personal use.8.Paid Chicago Tribune $600 of the amount due in transaction (4).
9.Paid employees’ salaries $2,500.10.Received $4,000 in cash from customers who have previously been billed in transaction (6).

(a)

Complete the tabular analysis of the transactions. (If a transaction results in a decrease in Assets, Liabilities or Owner’s Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 1-8 for example.)

BROWNS TRAVEL AGENCY

Assets

Liabilities

Owners Equity

Cash

Accounts
Receivable

Supplies

Equipment

Accounts
Payable

Owners
Capital

Owners
Drawings

Revenues

Expenses

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10.

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Question 2

Sharon Lee opened a law office on July 1, 2022. On July 31, the balance sheet showed Cash $ 5,500, Accounts Receivable $ 1,800, Supplies $ 500, Equipment $ 6,200, Accounts Payable $ 4,200, and Owners Capital $ 9,800. During August, the following transactions occurred.

1.Collected $ 1,500 of accounts receivable.2.Paid $ 2,500 cash on accounts payable.3.Recognized revenue of $ 7,400 of which $ 1,700 is collected in cash and the balance is due in September.4.Purchased additional equipment for $ 2,000, paying $ 300 in cash and the balance on account.5.Paid salaries $ 2,600, rent for August $ 1,000, and advertising expenses $ 350.6.Withdrew $ 1,100 in cash for personal use.7.Received $ 1,700 from Standard Federal Bankmoney borrowed on a note payable.8.Incurred utility expenses for month on account $ 330.

(a)

Prepare a tabular analysis of the August transactions beginning with July 31 balances. (If a transaction results in a decrease in Assets, Liabilities or Owner’s Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 1-8 for example.)

SHARON LEE, ATTORNEY AT LAW