EYK3_3 - E x t e n d Yo u r K n o w l e d g e 3 3 Case...

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Extend Your Knowledge 3-3 Case: Journalizing based on source documents, posting, and preparing a trial balance Dispose-All began operations on October 1, 2005, and is owned by Greg Duncan. It is a waste-disposal business that caters to the specialized needs of both residen- tial and commercial customers. Dispose-All purchased 10 trucks and had 3 mod- iFed to carry a Fxed box for generating full-service, hand-loading revenue. The other seven trucks were altered to accommodate roll-off bins that are dropped at a location speciFed by the customer, who then self-loads; the roll-off bins are col- lected by a Dispose-All driver when the bin is full. Initially, Duncan will manage the ofFce himself and will contract his two sons, Everett and Jeremy, to drive. The drivers get paid by the job: $50 per roll-off delivery and $100 per full-service order. As demand increases, additional help will be hired. Dispose-All set up the following chart of accounts: Account Name No. Account Name No. Cash . .............................................. 101 Greg Duncan, Withdrawals . ......... 302 Accounts Receivable. .................... 106 Roll-off Bin Revenue . .................... 401 Prepaid Rent. ................................. 131 Full-Service, Hand-Loading Revenue. ........................................ 402 Prepaid Security Services. ............ 132 Driver Expense. ............................. 623 Trucks. ............................................ 153 Rent Expense. ................................ 640 Of±ce Equipment . ......................... 163 Security Service Expense . ............ 677 Security Equipment . ..................... 167 Repair Expense . ............................ 684 Safety Glasses. .............................. 169 Telephone Expense. ...................... 688 Accounts Payable. ......................... 201 Gas Utilities Expense. ................... 689 Notes Payable . .............................. 251 Electrical Utilities Expense . .......... 690 Greg Duncan, Capital. ................... 301 Internet Expense . .......................... 691
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During its frst month oF operations, the Following activities occurred (Hint: You will have to reFer to the source documents on pages EYK3-3:3 to EYK3-3:23 For details): 1. Greg Duncan, the owner, invested cash into the business (Source Document 1). 2. Purchased 10 trucks (Source Documents 2(a) and 2(b)). 3. Rented a warehouse (Source Document 3). 4. Purchased oFfce equipment (Source Document 4). 5. Purchased security equipment and service (Source Document 5). 6. Purchased saFety glasses For truck drivers and bin loaders (Source Documents 6(a) and 6(b)). 7. Delivered a roll-oFF bin to a customer (Source Document 7). 8. Sent out a truck For a Full-service client (Source Document 8). 9. The printer purchased in (4) above was repaired (Source Document 9). 10. Sent out a truck For a Full-service client (Source Document 10). 11. Delivered a roll-oFF bin to a customer (Source Document 11). 12. Received the telephone bill today (Source Document 12). 13. Received the gas bill today (Source Document 13). 14. Sent out two trucks For a Full-service client (Source Document 14). 15. Received the Internet bill today (Source Document 15). 16. Received the cell phone bill today (Source Document 16). 17. Received the electricity bill today (Source Document 17). 18. Paid the truck drivers today (Source Documents 18(a) and 18(b); the drivers are selF-employed and get paid by the job). Required 1. Open T-accounts based on the chart oF accounts (provided on pages EYK3-3:24 to EYK3-3:27).
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EYK3_3 - E x t e n d Yo u r K n o w l e d g e 3 3 Case...

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