Larry Matt Completed These Transactions During December of the Current

question 230

Essay

Larry Matt completed these transactions during December of the current year:
$\begin{array}{|l|l|}\hline\text { Dec. } 1 & \begin{array}{l}\text { Began a financial services practice by investing } \$ 15,000 \text { cash and office } \\\text { equipment having a } \$ 5,000 \text { value. }\end{array} \\\hline 2 & \text { Purchased } \$ 1,200 \text { of office equipment on credit. } \\\hline 3 & \text { Purchased } \$ 300 \text { of office supplies on credit. } \\\hline 4 & \begin{array}{l}&\text { Completed work for a client and immediately received a payment of } \$ 900 \\&\text { cash. }\end{array} \\\hline8 & \text { Completed work for Precept Paper Co. on credit, } \$ 1,700 .\\\hline 10&\text { Paid for the supplies purchased on credit on December } 3 \text {. } \\\hline14& \text { Paid for the annual } \$ 960 \text { premium on an insurance policy. } \\\hline 18&\begin{array}{l}\text { Received payment in full from Precept Paper Co. for the work completed on } \\\text { December } 8 \text {. }\end{array} \\\hline27& \text { Larry withdrew } \$ 650 \text { cash from the practice to pay personal expenses. } \\\hline30& \text { Paid } \$ 175 \text { cash for the December utility bills. } \\\hline30 & \text { Received } \$ 2,000 \text { from a client for financial services to be rendered next year. }\\\hline\end{array}$

Prepare general journal entries to record these transactions.

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Definitions:

Net Income

The profit of a company after all expenses and taxes have been deducted from total revenue.

EBIT

Earnings Before Interest and Taxes, a firm's earnings metric, accounts for all operational expenses aside from interest and taxes.

Return on Equity Ratio

The return on equity ratio measures a company's profitability by revealing how much profit a company generates with the money shareholders have invested.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue by comparing sales with total assets.