1. Hillsborough Services was formed on May 1, 2019. The
following transactions took place during the first month.
Transactions on May 1.
1. Stockholders invested $50, 000 cash in exchange for common stock.
2. Hired two employees to work in the warehouse, They will each be paid a salary of $2800 per month.
3. Signed a 2-year rental agreement on a warehouse, paid $24,000 cash in advance for the first year.
4. Purchase furniture and equipment costing $ 28,000. A cash payment of $ 5000 was paid immediately; the remainder will be paid in 6 months.
5. Paid $, 640 cash for a one-year insurance policy on the furniture and equipment.
Transactions during the remainder of the month.
6, Purchase basic office supplies for $ 750 cash'
7. Purchase more office supplies for $1, 300 on account.
8. Total revenues earned were $ 18, 000- $6,000 cash and $12, 000 on account.
9. Paid $ 400 to suppliers for account payable due.
10. Received $ 3,200 from customers in payment of accounts receivable.
11. Received utility bills n the amount of $ 260, to be paid next month.
12. Paid the monthly salaries of the two employees, totaling $ 5,600.
INSTRUCTIONS:
(a). Prepared journal entries to record each of the events listed. ( Omit explanations.)
(b). Post the journal entries to T-accounts.
(c). Prepare a trial balance as of May 31, 2019.
Transactions on May 1.
1. Stockholders invested $50, 000 cash in exchange for common stock.
2. Hired two employees to work in the warehouse, They will each be paid a salary of $2800 per month.
3. Signed a 2-year rental agreement on a warehouse, paid $24,000 cash in advance for the first year.
4. Purchase furniture and equipment costing $ 28,000. A cash payment of $ 5000 was paid immediately; the remainder will be paid in 6 months.
5. Paid $, 640 cash for a one-year insurance policy on the furniture and equipment.
Transactions during the remainder of the month.
6, Purchase basic office supplies for $ 750 cash'
7. Purchase more office supplies for $1, 300 on account.
8. Total revenues earned were $ 18, 000- $6,000 cash and $12, 000 on account.
9. Paid $ 400 to suppliers for account payable due.
10. Received $ 3,200 from customers in payment of accounts receivable.
11. Received utility bills n the amount of $ 260, to be paid next month.
12. Paid the monthly salaries of the two employees, totaling $ 5,600.
INSTRUCTIONS:
(a). Prepared journal entries to record each of the events listed. ( Omit explanations.)
(b). Post the journal entries to T-accounts.
(c). Prepare a trial balance as of May 31, 2019.
