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Bob Lutz opened a secretarial school called Best Secretarial Training.

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a. Lutz contributed the following assets to the business:
Cash ……………………………..$5,700
Computers ………………………. 4,300
Office Equipment ……………….. 3,600
b. Found a location for his business and paid the first month’s rent, $260.
c. Paid for an advertisement announcing the opening of the school, $190.
d. Received applications from three students for a four-week secretarial program and two students for a ten-day keyboarding course. The students will be billed a total of $1,300.
e. Purchased supplies on credit, $330.
f. Billed the enrolled student, $1,740.
g. Purchased a second-hand computer, $480, and office equipment, $380, on credit.
h. Paid for the supplies purchased on credit in e, $330.
i. Paid cash to repair a broken computer, $40.
j. Received partial payment from students previously billed, $1,080.
k. Paid the utility bill for the current month, $90.
l. Paid an assistant one week’s salary, $440.
m. Made a cash withdrawal of $330.
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1. Set up the following T accounts: Cash; Accounts Receivable. Supplies; Computers; Office Equipment: Accounts Payable; B. Lutz, Capital; B. Lutz, Withdrawals, Tuition Revenue; Salaries Expense; Utilities Expense; Rent Expense; Repair Expense; and Advertising Expense.
2. Record the transactions directly in the T accounts, using the transaction letter to identify each debit and credit.
3. Prepare a trial balance using today’s date.
4. Examine transactions f and j. What were the revenues and how much cash was received from the revenues? What business issues might you see arising from the differences in these numbers?  Get FInance Help Today

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