Solution-Prepare a cash t-account and compute company cash

Prepare a cash t-account and compute company cash balance

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Reference no: EM133010274

Rahal and Watson, a small manufacturing company, entered into the following cash transactions during January 2020:

Issued 800 shares of common stock for $30 each.
Collected $3,900 on outstanding accounts receivable.
Paid payroll for the month of January of $1,530.
Purchased property for $12,000 cash.
Paid a $6,000 dividend.
Sold an equipment with a book value of $5,000 for $7,000 cash.
Paid $2,000 to the bank: $900 to reduce the principal on an outstanding loan and $1,100 as an interest payment for interest incurred during the month of January.
Paid $5,000 for miscellaneous expenses incurred during the month of January.

Question 1: Prepare a journal entry for each transaction. Indicate the classification and the effect on the accounting equation.

Question 2: Prepare a cash T-account and compute the company's cash balance as of the end of January. Assume a beginning balance of $4,000.

Reference no: EM133010274

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Prepare a cash t-account and compute company cash balance

Reference no: EM133010274

Reference no: EM133010274

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