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Gordon Beckham

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[DR. NABIL ABD ELRAOUF]
Principles of Financial Accounting
Principles of Financial Accounting
Dr. Nabil Abd Elraouf
Section 6
TA: Ahmed Sa'eed
The Second Chapter
Understand the Accounting Framework
General Journal and Accounting Equation:
1- Journalizing Transactions and Events:
Ex. No. 2
P. 34 (Accounting Principles – Kieso – P1-4A)
Gordon Beckham started his own delivery service, Beckham Deliveries, on June 1, 2012.
The Following occurred during the month of June.
June 1
2
3
5
9
12
15
17
20
23
26
29
30
Page 1
Gordon invested $10,000 cash in the business.
Purchased a used van for deliveries for $12,000. Gordon Paid $2,000 cash
and signed a note payable for the remaining balance.
Paid $500 for office rent for the month.
Performed $4,400 of services on account.
Withdrew $200 cash for personal use.
Purchased supplies for $150 on account.
Received a cash payment of $1,250 for services provided on June 5.
Purchased gasoline for $200 on account.
Received a cash payment of $1,300 for services provided.
Made cash payment of $600 on the note payable.
Paid $250 for utilities.
Paid for the gasoline purchased on account in June 17.
Paid $1,000 for employee salaries.
TA: Ahmed Sa'eed
[DR. NABIL ABD ELRAOUF]
Principles of Financial Accounting
Beckham Deliveries
General Journal
Date
June. 23
June. 26
June. 29
June. 30
Account & Explanation
Notes Payable
Cash
Made a cash payment on the note payable
Utilities Expense
Cash
Paid cash for utilities
Accounts Payable
Cash
Paid for the gasoline purchased on account on June.
17
Salaries Expense
Cash
Paid for employees salaries
Debits (Dr.) Credits (Cr.)
$600
$600
$250
$250
$200
$200
$1,000
$1,000
2- How the Transactions affect the Accounting Equation:
Transaction 10:
Basic Analysis: Gordon paid cash on the note payable (from transaction 2) so that
means cash will be decreased and since cash is an Asset so it will be credited, and on the
other side note payable is debited as it has decreased and it is a liability.
Transaction 11:
Basic Analysis: He then paid cash for utilities, so it will be credited as it's an Asset,
and utilities expense will be debited as it is an expense account.
Transaction 12:
Basic Analysis: Gordon pays cash for gasoline purchased on account on June 17,
which will be credited as it is an Asset, and accounts payable will be debited as it has
decreased.
Transaction 13:
Basic Analysis: Gordon paid cash for Employees Salaries, so it will be credited as it's
an Asset, and utilities expense will be debited as it is an expense.
Page 2
TA: Ahmed Sa'eed
[DR. NABIL ABD ELRAOUF]
Principles of Financial Accounting
Beckham Deliveries
Trial Balance
30, June 2012
Accounts
Cash
Cars
Supplies
Accounts Receivable
Accounts Payable
Notes Payable
Owner's Capital
Owner's Drawing's
Services Revenue
Rent Expense
Gasoline Expense
Utilities Expense
Salaries Expense
Page 3
Debits
7,800
12,000
150
1850
200
500
200
250
1,000
23,950
Credits
150
9,400
10,000
4,400
23,950
TA: Ahmed Sa'eed
Equation Analysis:
Assets
Cash
1
2
+
+10,00
0
-2,000
3
4
5
6
-500
7
8
+1,250
9
10
11
12
13
+1,300
-600
-250
-200
-1,000
7,800
Cars
=
+ Supplies
+ Accounts
Receivable
=
Liabilities
Accounts +
Payable
Notes
Payable
+
+
Owner's Equity
Owner's
Capital
+
Owner's
Drawings
+
Revenues
-
+10,000
+12,000
+10,000
-500
+4,400
+4,400
-200
-200
+150
+150
-1,250
+200
-200
-1,300
-600
-250
-200
+
12,000
+
21,800
Page 4
Expenses
150
+
1,850
=
=
150
+
9,400
+
10,000
-
200
+
4,400
-
-1,000
1,950
21,800
TA: Ahmed Sa'eed
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