17E_2 - Horngren'S Financial And Managerial Accounting

Question

Question: The following transactions occurred for Lawrence Engineering: 

Jul. 2 Received \(14,000 contribution from Brett Lawrence in exchange for common stock. 

4 Paid utilities expense of \)370. 

5 Purchased equipment on account, \(1,600. 

10 Performed services for a client on account, \)2,900. 

12 Borrowed \(7,100 cash, signing a notes payable. 

19 Cash dividends of \)200 were paid to stockholders. 

21 Purchased office supplies for $840 and paid cash. 

27 Paid the liability from July 5.

Requirements 1. Open the following T-accounts for Lawrence Engineering: Cash; Accounts Receivable; Office Supplies; Equipment; Accounts Payable; Notes Payable; Common Stock; Dividends; Service Revenue; and Utilities Expense.

Step-by-Step Solution

Answer

Accounts receivables are amounts to the company and the T-Accounts are opened as required.

Step-by-Step Solution Step 1: Definition of Accounts Receivables

The accounts receivables are the amount owed to the business by the customers or clients in exchange for goods or services.

Step 2: Opening of T-Accounts

Cash
Jul 2    $ 14,000	$370   Jul 4
Jul 12  $7,100	$200   Jul 19
	$840     Jul 21
	$1,600      Jul  27

 

Accounts Receivables
Jul 10      $2,900

 

Office Supplies
Jul 21        $840

 

Equipment
Jul 5        $1,600

 

Accounts Payable
Jul 27         $1,600	$1,600          Jul 5

 

Notes Payable
	$7,100         Jul 12

 

Common Stock
	$14,000        Jul 2

 

Dividends
Jul 19         200

 

Service Revenue
	$2,900          Jul 10

 

Utilities Expense
Jul 4   370