Required: a) Prepare Journal Entry for business transaction for the second month in the following General Journal . Required:

Required: a) Prepare Journal Entry for business transaction for the second month in the following General Journal . Required:

Question:

Required: a) Prepare Journal Entry for business transaction for the second month in the following General Journal. Required: b) Prepare Financial Statement for the first month.Required:  C) Classify each event in the second month as financing, investing, or operating.
 
 

Transcribed Image Text:

Problem: In October, ITP experienced the following events.
1. ITP borrowed additional $2,000 cash from Fortis Bank.
2. ITP rented a studio for a bargained price of $1,000 per month. In order to get this deal, on October 1, ITP paid
$3,000 cash in advance for the future three months.
3. ITP paid $1,200 cash to purchase one additional flash and two lenses on October 1. These equipment are
expected to be used for two years, and has no residual value.
4. ITP completed five 2-hour photo sessions in September. ITP charged $200 for each hour. Payment for all five
sessions are received for total $2,000 in cash.
5. ITP completed two 2-hour photo sessions for uncle Sam, which has been paid in September.
6. ITP paid $100 cash for utility expense on October 20.
7. ITP made a $100 cash dividend to the owners.
8a. ITP continued to allocate $300 as depreciation expense for October.
Transactions/
Balance Sheet (Accounting Equation)
Total Assets
=Total Liabilities+ Owners’ Equity
Cash + Prepaids + Equipment = N/P + Un Rev.+ Com.Stk. +Ret.Ear.
5,100+ 0 + 6,900 = 3,000+ 700 + 8,000 + 300
Event
No.
Bal.
1.
2.
3.
4.
5.
6.
7.
8(Adj)
Adj b.
Adj c.
Totals
=
=
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=
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8
Income Statement
Rev. – Exp. = Net Inc.
0 – 0
Statement of
Cash Flows
5,100

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SOLUTION a Journal Entry for Business Transactions for the Second Month Borrowed additional 2 000 ca
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