On March 1 of this year, B. Gervais established Gervais Catering Service. The account headings…
On March 1 of this year, B. Gervais established Gervais Catering Service. The account headings are presented below. Transactions completed during the month follow
a. Gervais deposited $25,000 in a bank account in the name of the business.
b. Bought a truck from Kelly Motors for $26,329, paying $8,000 in cash and placing the balance on account, Ck. No. 500.
c. Bought catering equipment on account from Luigi’s Equipment, $3,795.
d. Paid the rent for the month, $1,255, Ck. No. 501 (Rent Expense).
e. Bought insurance for the truck for one year, $400, Ck. No. 502.
f. Sold catering services for cash for the first half of the month, $3,012 (Catering Income).
g. Bought supplies for cash, $185, Ck. No. 503.
h. Sold catering services on account, $4,307 (Catering Income).
i. Received and paid the heating bill, $248, Ck. No. 504 (Utilities Expense).
j. Received a bill from GC Gas and Lube for gas and oil for the truck, $128 (Gas and Oil Expense).
k. Sold catering services for cash for the remainder of the month, $2,649 (Catering Income).
l. Gervais withdrew cash for personal use, $1,550, Ck. No. 505.
m. Paid the salary of the assistant, $1,150, Ck. No. 506 (Salary Expense).
1. In the equation, write the owner’s name above the terms Capital and Drawing.
2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses.
3. Write the account totals from the left side of the equal sign and add them. Write the account totals from the right side of the equal sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, reanalyze each transaction.