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Accounting+Ex+-+Solution - FLOWCHART OVERVIEW UGBA 102A...

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FLOWCHART OVERVIEW UGBA 102A – Accounting Process Example Page 1
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1 and 2. BUSINESS TRANSACTION OCCURS After getting a fabulous education at Haas and graduating magna cum lucky, Joe Polar starts a business selling laptops and programming services. He calls the company Bear Necessities and begins operations on September 1, 2010. The following transactions occurred during September 2010: (1) 9/1 Joe invests $15,000 cash in the company (he was part of the Investment Club at Cal). (2) 9/1 He purchases office equipment costing $6,000. The equipment will be used for 5 years. (3) 9/1 Ever the consummate sales person, he convinces Wells Fargo Bank to lend him $5,000 for one year on a note. Interest of 6% is payable at maturity. (4) 9/1 Remembering how close Haas was to Boalt Law School, he makes sure that he purchases a one-year insurance policy for $4,800. 9/1 He hires two employees (though he’s disappointed that the only employees he could get were from a lesser university in Palo Alto). (5) 9/5 Computer paper and office supplies are purchased for $1,600. Payment to the supplier is due in 30 days. (6) 9/5 Continuing the spending spree, he purchases 3 computers for $1,200 each to be sold to customers. (7) 9/8 The company receives a bill for $200 from the Silicon Valley Boom and Bust newspaper for advertising the opening of the business in September. The bill is payable in 20 days. (8) 9/10 Their first customer! They provide programming services, issue an invoice for $1,200 and receive payment from the customer. (9) 9/10 He writes a check for $800 for September office rent. (10) 9/15 The company collects $9,000 in advance to provide 3 months of computer maintenance service to Tech Startup. (11) 9/20 They provide programming services of $3,500 to customers on account and send invoices. (12) 9/22 They sell 1 computer to a customer for $2,500. (13) 9/26 The advertising bill is paid. (14) 9/29 They receive $1,000 payment from customers billed on 9/20. (15)
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Accounting+Ex+-+Solution - FLOWCHART OVERVIEW UGBA 102A...

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