Chapter 1, Problem 4PB

In March, T. Carter established Carter Delivery Service. The account headings are presented below. Transactions completed during the month of March follow.

1. a. Carter deposited $25,000 in a bank account in the name of the business.
2. b. Bought a used truck from Degroot Motors for $15,140, paying $5,140 in cash and placing the remainder on account.
3. c. Bought equipment on account from Flemming Company, $3,450.
4. d. Paid the rent for the month, $1,000, Ck. No. 3001 (Rent Expense).
5. e. Sold services for cash for the first half of the month, $6,927 (Service Income).
6. f. Bought supplies for cash, $301, Ck. No. 3002.
7. g. Bought insurance for the truck for the year, $1,200, Ck. No. 3003.
8. h. Received and paid the bill for utilities, $349, Ck. No. 3004 (Utilities Expense).
9. i. Received a bill for gas and oil for the truck, $218 (Gas and Oil Expense).
10. j. Sold services on account, $3,603 (Service Income).
11. k. Sold services for cash for the remainder of the month, $4,612 (Service Income).
12. l. Paid wages to the employees, $3,958, Ck. Nos. 3005–3007 (Wages Expense).
13. m. Carter withdrew cash for personal use, $1,250, Ck. No. 3008.

Required

1. 1. In the equation, write the owner’s name above the terms Capital and Drawing.
2. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses.
3. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.