Question

required: post the following journal entries to the t - accounts and compute the ending balance for each account. january 1 cash 50,000 notes payable 50,000 january 4 equipment 25,000 cash 25,000 january 6 rent expense 500 cash 500 january 15 accounts receivable 10,000 service revenue 10,000 january 25 cash 3,000 accounts receivable 3,000 january 28 land 200,000 cash 10,000 notes payable 190,000 january 30 salaries expense 2,500 cash 2,500

Explanation:

Step1: Calculate cash - in transactions for Cash account

Add all cash receipts. Initial cash is 12,000, then on January 1 we have 50,000, January 25 we have 3,000.
$12000 + 50000+3000$

Step2: Calculate cash - out transactions for Cash account

Add all cash payments. On January 4 we pay 25,000, January 6 we pay 500, January 28 we pay 10,000, January 30 we pay 2,500.
$25000 + 500+10000 + 2500$

Step3: Compute ending balance of Cash account

Subtract total cash - out from total cash - in.
$(12000 + 50000+3000)-(25000 + 500+10000 + 2500)$
$=65000 - 38000=27000$

Step4: Calculate ending balance of Accounts Receivable account

Initial balance is 6,300. On January 15 we add 10,000 and on January 25 we subtract 3,000.
$6300+10000 - 3000=13300$

Answer:

Cash ending balance: 27000
Accounts Receivable ending balance: 13300