221-101 Principles of Financial Accounting

Assignment 06

Deadline: 29th October 2020

Guidelines:

Upload your answers in PDF format under “Assignment 06” in Moodle.

Question 01:

The following accounts are applicable to Tom’s Warehouse Sweeps:

1. Cash 7. Prepaid Insurance

2. Accounts Payable 8. Service Revenue
3. Accounts Receivable 9. Equipment
4. T. Henzel, Capital 10. Rent Expense
5. Supplies 11. Notes Payable
6. T. Henzel, Withdrawals 12. Repair Expense

Tom’s Warehouse Sweeps completed the transactions indicated below. Analyze each transaction
and show the accounts affected by entering the corresponding numbers in the appropriate debit
or credit column as shown in (a). Indicate no entry, if appropriate. (Hint: Refer slide 19)
Debit Credit
a. Paid for supplies purchased on credit last month. 7 1
b. Billed customers for services performed. __ __
c. Paid the current month’s rent. __ __
d. Purchased supplies on credit. __ __
e. Received cash from customers for services performed but not yet billed. __ __
f. Purchased equipment on account. __ __
g. Received a bill for repairs. __ __
h. Returned part of the equipment purchased in f for a credit. __ __
i. Received payments from customers previously billed. __ __
j. Paid the bill received in g. __ __
k. Received an order for services to be performed. __ __
l. Paid for repairs with cash. __ __
m. Made a payment to reduce the principal of the note payable. __ __
n. Made a cash withdrawal. __ __
Question 02:

(i) Open the following T accounts:

1. Cash; 6. Withdrawals;
2. Repair Supplies; 7. Repair Fees Earned;
3. Repair Equipment; 8. Salaries Expense;
4. Accounts Payable; 9. Rent Expense.
5. T. Ornega, Capital;

(ii) Record the following transactions for the month of June directly in the T accounts
opened. (Hint: Refer example problem II on slide 15 and follow its format)

a. Tony Ornega opened Ornega Repair Service by investing $4,300 in cash and $1,600 in
repair equipment.
b. Paid $800 for the current month’s rent.
c. Purchased repair supplies on credit, $1,100.
d. Purchased additional repair equipment for cash, $600.
e. Paid salary to a helper, $900.
f. Paid $400 of amount purchased on credit in c.
g. Accepted cash for repairs completed, $3,720.
h. Withdrew $1,000 in cash.