Selected Transactions for Garver Company During Its First Month in Business

question 50

Essay

Selected transactions for Garver Company during its first month in business are presented below.
Sept. 1 Invested $25,000 cash in the business in exchange for common stock.
5 Purchased equipment for $27,000 paying $6,000 in cash and the balance on account.
11 Performed $3,900 of services for clients, collecting $1,000 cash and billing them for the remainder.
25 Paid $7,000 cash on balance owed for equipment.
30 Declared and paid a $600 cash dividend.
30 Collected $1,200 from the clients from the September 11 transactions.
The Chart of accounts shows: No. 101 Cash, No. 112 Accounts Receivable, No. 157 Equipment, No. 201 Accounts Payable, No. 311 Common Stock, No. 332 Dividends, and No. 400 Service Revenue.
Instructions
(a) Journalize the transactions on page 1 of the journal (Omit explanations).
(b) Post the transactions using the standard account form.
(c) Based only on these transactions, what amount would Garver Company report as total assets in the October 31 balance sheet?
(d) Based only on these transactions, what amount would Garver Company report as total liabilities in the October 31 balance sheet.

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Definitions:

Hydrogen Bonds

A weak bond between two molecules resulting from an electrostatic attraction between a proton in one molecule and an electronegative atom in the other.

Capillary Action

The ability of a liquid to flow in narrow spaces without the assistance of external forces like gravity.

Water Transport

The movement of water and solutes across a plant, from roots to leaves, through the xylem and phloem, essential for nutrient distribution and photosynthesis.

Ionic Bond

A chemical bond formed between two ions with opposite charges through the transfer of electrons from one atom to another.