Reference no: EM132830213

Problem - Record the following transactions for Stokes Driving School in these accounts: Cash; Accounts Receivable/L. Starr; Equipment, Automobiles; Accounts Payable/Grant's Esso; R. Stokes, Capital; Revenue from Lessons; Salaries Expense; Advertising Expense; Automobile Expense; Utilities Expense.

Aug. 1 R. Stokes invested $35,000 cash.

Aug. 2 Purchased equipment for $2000 cash.

Aug. 4 Purchased two cars from Dardick Motors for $30,000 cash.

Aug. 5 Received $700 cash from customers' driving lessons.

Aug. 7 Paid $700 cash for instructor's salary for the first week.

Aug. 9 Paid $45 cash to the telephone company.

Aug. 10 Received $800 cash from customers taking driving lessons.

Aug. 11 Issued a bill of $100 to L. Starr, who is taking lessons but will pay at a later date.

Aug. 11 Received a bill for $75 from Grant's Esso for gas and oil used by the cars.

Aug. 12 Paid $95 cash for hydro and electricity.

Aug. 13 Sent a $290 cheque to the Daily Star for advertising space.

Aug. 14 Received $100 cash from L. Starr in payment of a bill sent previously.

Required -

(a) Balance the accounts and prepare a trial balance.

(b) Prepare an income statement for the two weeks ended August 14.