Colon Transportation, Inc. was formed to provide bus services for a fee to public and private schools. The business was organized as a corporation. The transactions taking place during July, are as follows: July 1: Provided services to a customer and received $42,000 cash. July 2: Purchased land and a building at a cost of $53,000, of which $20,000 was regarded as applicable to the land and the remaining to the building. The transaction involved a cash payment of $18,000 and the issuance of note payable for the balance of the purchase price. July 5: Received $100,000 from the shareholders in exchange for its capital stock. July 6: Purchased 9 new buses at a cost of $27,000 each. Paid $80,000 cash, and signed a note for the remaining amount. July 9: Placed advertising in a newspaper and paid $120 cash. July 14: Obtained a credit from bank. Received $55,000 cash and signed a note for that amount. July 20: Sold one of the buses to another firm at a price equal to the cost of the bus. The buyer paid $15,000 and agreed to pay the balance within 30 days. July 24: Completed $40,000 of services for several customers. This amount was to be received within 30 days. July 26: Paid $10,000 for partial settlement of the liability created on July 14. July 28: Collected $23,000 cash from the customer to whom service was provided on July 24. July 29: Paid $1,000 for regular repair & maintenance of the buses. July 30: Paid $5,000 dividend to the shareholders. Required: a) Journalize each transaction (explanations are not required). b) Post the journal to the ledger accounts. c) Prepare a trial balance for Colon Transportation, Inc. as of July 31, 2012.
Colon Transportation, Inc. was formed to provide bus services for a fee to public and private schools. The business was organized as a corporation. The transactions taking place during July, are as follows: July 1: Provided services to a customer and received $42,000 cash. July 2: Purchased land and a building at a cost of $53,000, of which $20,000 was regarded as applicable to the land and the remaining to the building. The transaction involved a cash payment of $18,000 and the issuance of note payable for the balance of the purchase price. July 5: Received $100,000 from the shareholders in exchange for its capital stock. July 6: Purchased 9 new buses at a cost of $27,000 each. Paid $80,000 cash, and signed a note for the remaining amount. July 9: Placed advertising in a newspaper and paid $120 cash. July 14: Obtained a credit from bank. Received $55,000 cash and signed a note for that amount. July 20: Sold one of the buses to another firm at a price equal to the cost of the bus. The buyer paid $15,000 and agreed to pay the balance within 30 days. July 24: Completed $40,000 of services for several customers. This amount was to be received within 30 days. July 26: Paid $10,000 for partial settlement of the liability created on July 14. July 28: Collected $23,000 cash from the customer to whom service was provided on July 24. July 29: Paid $1,000 for regular repair & maintenance of the buses. July 30: Paid $5,000 dividend to the shareholders. Required: a) Journalize each transaction (explanations are not required). b) Post the journal to the ledger accounts. c) Prepare a trial balance for Colon Transportation, Inc. as of July 31, 2012.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Colon Transportation, Inc. was formed to provide bus services for a fee to public and private
schools. The business was organized as a corporation. The transactions taking place during July, are
as follows:
July 1: Provided services to a customer and received $42,000 cash.
July 2: Purchased land and a building at a cost of $53,000, of which $20,000 was regarded
as applicable to the land and the remaining to the building. The transaction involved a cash
payment of $18,000 and the issuance of note payable for the balance of the purchase price.
July 5: Received $100,000 from the shareholders in exchange for its capital stock.
July 6: Purchased 9 new buses at a cost of $27,000 each. Paid $80,000 cash, and signed
a note for the remaining amount.
July 9: Placed advertising in a newspaper and paid $120 cash.
July 14: Obtained a credit from bank. Received $55,000 cash and signed a note for that amount.
July 20: Sold one of the buses to another firm at a price equal to the cost of the bus. The buyer
paid $15,000 and agreed to pay the balance within 30 days.
July 24: Completed $40,000 of services for several customers. This amount was to be received
within 30 days.
July 26: Paid $10,000 for partial settlement of the liability created on July 14.
July 28: Collected $23,000 cash from the customer to whom service was provided on July 24.
July 29: Paid $1,000 for regular repair & maintenance of the buses.
July 30: Paid $5,000 dividend to the shareholders.
Required:
a) Journalize each transaction (explanations are not required).
b) Post the journal to the ledger accounts.
c) Prepare a trial balance for Colon Transportation, Inc. as of July 31, 2012.
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