Below are the transactions for Ute Sewing Shop for March, the first month of operations. March 1 Issue common stock in exchange for cash of $3,000.
March 3 Purchase sewing equipment by signing a note with the local bank, $2,700.
March 5 Pay rent of $600 for March.
March 7 Martha, a customer, places an order for alterations to several dresses. Ute estimates that the alterations will cost Martha $800. Martha is not required to pay for the alterations until the work is complete.
March 12 Purchase sewing supplies for $130 on account. This material will be used to provide services to customers.
March 15 Ute delivers altered dresses to Martha and receives $800.
March 19 Ute agrees to alter 10 business suits for Bob, who has lost a significant amount of weight recently. Ute receives $700 from Bob and promises the suits to be completed by March 25.
March 25 Ute delivers 10 altered business suits to Bob.
March 30 Pay utilities of $95 for the current period.
March 31 Pay dividends of $150 to stockholders.
1. Record each transaction.
2. Post each transaction to the appropriate T-accounts.
3. Calculate the balance of each account at March 31.
4. Prepare a trial balance as of March 31. Ute uses the following accounts: Cash, Supplies, Equipment, Accounts Payable, Deferred Revenue, Notes Payable, Common Stock, Dividends, Service Revenue, Rent Expense, and Utilities Expense.

1. Record each transaction.

March 1 Issue common stock in exchange for cash of $3,000.

Dr Cash 3,000

    Cr Common stock 3,000

March 3 Purchase sewing equipment by signing a note with the local bank, $2,700.

Dr Equipment 2,700

    Cr Notes payable 2,700

March 5 Pay rent of $600 for March.

Dr Rent expense 600

    Cr Cash 600

March 7 Martha, a customer, places an order for alterations to several dresses. Ute estimates that the alterations will cost Martha $800. Martha is not required to pay for the alterations until the work is complete.

no journal entry required since no work has been done nor nay money has been received

March 12 Purchase sewing supplies for $130 on account. This material will be used to provide services to customers.

Dr Supplies 130

    Cr Accounts payable 130

March 15 Ute delivers altered dresses to Martha and receives $800.

Dr Cash 800

    Cr Service revenue 800

March 19 Ute agrees to alter 10 business suits for Bob, who has lost a significant amount of weight recently. Ute receives $700 from Bob and promises the suits to be completed by March 25.

Dr Cash 700

    Cr Unearned revenue 700

March 25 Ute delivers 10 altered business suits to Bob.

Dr Unearned revenue 700

    Cr Service revenue 700

March 30 Pay utilities of $95 for the current period.

Dr Utilities expense 95

    Cr Cash 95

March 31 Pay dividends of $150 to stockholders.

Dr Retained earnings 150

    Cr Cash 150

2. Post each transaction to the appropriate T-accounts.

3. Calculate the balance of each account at March 31.

cash                                       common stock

debit     credit                        debit     credit

3000                                                    3000

             600

800

700

             95

             150      

3655

equipment                             notes payable

debit     credit                        debit     credit

2700                                                    2700

rent expense                         service revenue

debit     credit                        debit     credit

600                                                      800

                                                            700  

                                                            1500

supplies                                 accounts payable

debit     credit                        debit     credit

130                                                       130

unearned revenue                utilities expense

debit     credit                        debit     credit

             700                           95

700

retained earnings                  dividends

debit     credit                        debit     credit        

                                              150

4. Prepare a trial balance as of March 31.

first we need to calculate net income = $1,500 - $95 - $600 = $805

retained earnings = $805 - $150 = $655

Ute Sewing Shop

Balance Sheet

For the Month Ended March 31, 202x

Assets:

Cash $3,655

Supplies $130

Equipment $2,700

total Assets: $6,485

Liabilities and stockholders' equity:

Accounts Payable $130

Notes Payable $2,700

Common Stock $3,000

Retained earnings $655

total liabilities and stockholders' equity: $6,485

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