On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $90,000 in cash along with equipment having a $50,000 value in exchange for common stock. On May 21, Elegant Lawns purchases office supplies on credit for $680. On May 25, Elegant Lawns receives $9,800 cash for performing landscaping services. On May 30, Elegant Lawns receives $3,000 cash in advance of providing landscaping services to a customer.

Required:
For each transaction:

a. Analyze the transaction using the accounting equation
b. Record the transaction in journal entry form
c. Post the entry using T-accounts to represent ledger accounts.

Answer :

Answer:

All requirements are solved

Explanation:

In requirement 1 its clearly shown how these transactions are affecting the accounting equation. In requirement 2 all journal entries are posted and in requirement 3 All T - accounts are set.

Requirement 1: Accounting Equation

Event Assets = Liabilities + Equity

a      $140,000                   $140,000

b       $680            $680

c           $9,800                   $9,800

d          $3,000        $3,000.00

 

Requirement 2:  Journal Entries

                                                      DEBIT          CREDIT

a 15-May (cash and equipment invested in the business)  

Cash                                         $90,000  

Equipment                                $50,000  

D. Tyler Capital                                            $140,000

b 21-May (To record purchase of office supplies)  

Office supplies                          $680  

Accounts payable                                       $680

c 25-May (record landscaping revenue)  

Cash                                           $9,800

Landscaping revenue                             $9,800

d 30-May (To record advance collection against revenue)  

Cash                                            $3,000

Unearned Landscaping revenue                     $3,000

Requirement 3:  T accounts

Cash

Date                  Debit                         Date Credit

15-May               $90,000  

25-May               $9,800  

30-May                $3,000  

Ending balance    $102,800  

Equipment

Date                        Debit         Date Credit

15-May             $50,000  

Ending balance $50,000

 

Office Supplies

Date                  Debit Date Credit

21-May                 $680.00  

Ending balance $680.00  

Accounts Payable

Date              Debit                  Date                Credit

                                                  21-May                 $680.00

                                             Ending balance $680.00

Unearned landscaping revenue

Date                  Debit Date                 Credit

                                             30-May                 $3,000

                                          Ending balance     $3,000

D. Tayler Capital

Date    Debit                 Date            Credit

                                  15-May                  $90,000

                                  15-May                   $50,000

                              Ending balance   $140,000

Landscaping revenue

Date        Debit                          Date        Credit

                                                      25-May         $9,800

                                               Ending balance $9,800

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