Craig Fisher started a lawn service called Craig's Quick Cut to earn money over the summer months. Fisher has decided to use the following accounts for recording transactions:
Assets Revenue
Cash Lawn Fees
Accounts Receivable Expenses
Mowing Equipment Rent Expense
Lawn Tools Wages Expense
Liabilities Telephone Expense
Accounts Payable Gas and Oil Expense
Notes Payable Transportation Expense
Owner's Equity
Craig Fisher, Capital
Craig Fisher, Drawing
Transactions for the month of June are listed below.
(a) Invested cash in the business, $3,000.
(b) Bought mowing equipment for $1,000: paid $200 in cash and promised to pay the balance over the next four months.
(c) Paid garage rent for June, $50.
(d) Provided lawn services for customers on account, $520.
(e) Paid telephone bill, $30.
(f) Borrowed cash from the bank by signing a note payable, $500.
(g) Bought lawn tools, $480.
(h) Collected cash from customers for services performed on account in transaction
(d), $400.
(i) Paid associates for lawn work done during the first half of the month, $350.
(j) Paid for gas and oil for the equipment, $60.
(k) Paid cash on account for the mowing equipment purchased in transaction (b), $200.
(l) Earned lawn fees of $1,320: $600 in cash and $720 on account.
(m) Paid associates for last half of month, $700.
(n) Reimbursed associates for costs incurred using their own vehicles for transportation, $150.
(o) Paid on note payable to bank, $100.
(p) Withdrew cash for personal use, $200.
REQUIRED
1. Enter the transactions for June in T accounts. Use the accounting equation as a guide for setting up the T accounts.
2. Foot and balance the T accounts where necessary.
3. Prepare a trial balance of the accounts as of June 30, 20--.
4. Prepare an income statement for the month ended June 30, 20--.
5. Prepare a statement of owner's equity for the month ended June 30, 20--.
6. Prepare a balance sheet as of June 30, 20--.