17E_3 - 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

T-account shown in step 2.

Step-by-Step Solution Step 1: Definition of common stock

Common stocks are defined as the stocks or shares which represent the ownership of the business.

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
Bal.  $18,090

 

Accounts Receivables
Jul 10      $2,900
Bal.         $2,900

 

Office Supplies
Jul 21        $840
Bal.   $840

 

Equipment
Jul 5        $1,600
Bal.         $1,600

 

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

 

Notes Payable
	$7,100         Jul 12
	$7,100         Bal.

 

Common Stock
	$14,000        Jul 2
	$14,000         Bal.

 

Dividends
Jul 19          $200
Bal.             $200

 

Service Revenue
	$2,900          Jul 10
	$2,900        Bal.

 

Utilities Expense
Jul 4   $370
Bal.   $370