E2-39\t\u00a0\tBarbara Miracle, Certified Public Accountant, operates as a professional corporation (PC). The business completed these transactions during the first part of August 2016:\u00a0\tAug 2 Received $10,000 cash from Miracle, and issued common stock to her.\u00a0\t2 Paid monthly office rent, $600.\u00a0\t3 Paid cash for a Dell computer, $2,700, with the computer expected to remain in service for five years.\u00a0\t4 Purchased office furniture on account, $4,500, with the furniture projected to last for five years.\u00a0\t5 Purchased supplies on account, $800.\u00a0\t9 Performed tax services for a client and received cash for the full amount of $1,400.\u00a0\t12 Received and paid utility expenses, $300.\u00a0\t18 Performed consulting services for a client on account, $ 1,900.\u00a0\tRequirements\u00a0\t1. Journalize the transactions for Barbara Miracle, Certified Public Accountant. Explanations are not required.\u00a0\t2. Post to the T-accounts. Key all items by date and determine the ending balance in each account. Denote an account balance on August 18, 2016, as Bal.\u00a0\t3. Using Excel, prepare a trial balance at August 18, 2016. In the Serial Exercise of Chapter 3, we add transactions for the remainder of August and will require a trial balance at August 31.\u00a0\t\u00a0\t\u00a0\t\u00a0\tP3-59A\tOctober\u00a0 \u00a0 \u00a0 1\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Prepaid insurance for October through rs$3,900.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a04\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Purchased office furniture for cash,$4,500.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a05\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Performed services and received cash,$1,000.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a08\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Paid advertising expense,$500.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a011\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Performed service on account,$3,200.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a019\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Purchased computer on account,$1,900.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a024\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Collected for October 11 service.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a026\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Paid acoount payable from October 19.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a029\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Paid salary expense,$800.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a031\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Adjusted for October insurance expense (see October 1).\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a031\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Earned revenue of $800 that was collected in advance back in September.\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a031\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Recorded October depreciation expense on all fixed assets,$460.\t\u00a0\t\u00a0\tRequirements\t1. Show how each transaction would be handled (in terms of recognizing revenues and expenses) using the cash basis and the accrual basis.\t\u00a0\t2. Compute October income (loss) before tax under each accounting method.\t\u00a0\t3. Indicate which measure of net income or net loss is preferable. Use the transactions on October 11 and October 24 to explain.<\/p>\n","protected":false},"excerpt":{"rendered":"
E2-39 \u00a0 Barbara Miracle, Certified Public Accountant, operates as a professional corporation (PC). The business completed these transactions during the first part of August 2016:\u00a0 Aug 2 Received $10,000 cash from Miracle, and issued common stock to her.\u00a0 2 Paid Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-199810","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/199810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=199810"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/199810\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=199810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=199810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=199810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}