On 1st September 2015, the opening balances of ABC Company were as follows:
Accounts Debit
$ Credit
$
Cash 4,880
Accounts Receivable 3,520
Supplies 1500
Equipment 15,000
Accumulated Depreciation 1,500
Accounts Payable 3,400
Unearned Service Revenue 1,400
Capital 18,600
Total 24900 24900
During September 2015, the following transactions took place:
Sep 10: ABC received $1,200 cash from customers on account.
Sep 12: ABC received $3,400 cash for services performed in September.
Sep 15: ABC purchased equipment on account $3,000.
Sep 17: ABC purchased store supplies on account $ 3,200.
Sep 20: ABC paid creditors $4,500 on account.
Sep 22: ABC paid rent for September worth $500.
Sep 25: ABC paid salaries $1,250.
Sep 27: ABC billed customers for services provided in September worth $1,500
Sep 29: ABC received $650 from customers for services to be provided in October.
Adjustment Data:
1. Supplies on hand $ 1,200.
2. Accrued salaries payable $ 400.
3. Depreciation is $ 100 for September.
4. Unearned service revenue of $ 1,450 is earned in September
To determine the balances of the various accounts at the end of September 2015, we need to record and adjust the transactions that took place during the month. Let's go through each transaction and adjust the relevant accounts accordingly:
1. Sep 10: ABC received $1,200 cash from customers on account.
- Record an increase in the "Cash" account ($1,200) and a decrease in the "Accounts Receivable" account ($1,200).
2. Sep 12: ABC received $3,400 cash for services performed in September.
- Record an increase in the "Cash" account ($3,400) and an increase in the "Service Revenue" account ($3,400).
3. Sep 15: ABC purchased equipment on account for $3,000.
- Record an increase in the "Equipment" account ($3,000) and an increase in the "Accounts Payable" account ($3,000).
4. Sep 17: ABC purchased store supplies on account for $3,200.
- Record an increase in the "Supplies" account ($3,200) and an increase in the "Accounts Payable" account ($3,200).
5. Sep 20: ABC paid creditors $4,500 on account.
- Record a decrease in the "Cash" account ($4,500) and a decrease in the "Accounts Payable" account ($4,500).
6. Sep 22: ABC paid rent for September worth $500.
- Record a decrease in the "Cash" account ($500) and a decrease in the "Prepaid Rent" account ($500).
7. Sep 25: ABC paid salaries $1,250.
- Record a decrease in the "Cash" account ($1,250) and a decrease in the "Salaries Expense" account ($1,250).
8. Sep 27: ABC billed customers for services provided in September worth $1,500.
- Record an increase in the "Accounts Receivable" account ($1,500) and an increase in the "Service Revenue" account ($1,500).
9. Sep 29: ABC received $650 from customers for services to be provided in October.
- Record an increase in the "Cash" account ($650) and an increase in the "Unearned Service Revenue" account ($650).
10. Adjustment Data:
- Supplies on hand $1,200: Adjust the "Supplies" account by subtracting $1,200 from the previous balance.
- Accrued salaries payable $400: Record an increase in the "Salaries Expense" account ($400) and an increase in the "Salaries Payable" account ($400).
- Depreciation is $100 for September: Record an increase in the "Depreciation Expense" account ($100) and an increase in the "Accumulated Depreciation" account ($100).
- Unearned service revenue of $1,450 is earned in September: Record a decrease in the "Unearned Service Revenue" account ($1,450) and an increase in the "Service Revenue" account ($1,450).
Finally, calculate the new balances of the accounts at the end of September by adding all the transactions and adjustments to the opening balances.