Santa Ana Services was formed on May 1, 2014. The following transactions took place during the…

Santa Ana Services was formed on May 1, 2014. The following transactions took place during the first month.

Transactions on May 1:

1. Don Humes invested $40,000 cash in the company, as its sole owner.

2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,050 per month.

3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year.

4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was made immediately; the remainder will be paid in 6 months.

5. Paid $1,800 cash for a one-year insurance policy on the furniture and equipment.

Transactions during the remainder of the month:

6. Purchased basic office supplies for $500 cash.

7. Purchased more office supplies for $1,500 on account.

8. Total revenues earned were $20,000—$8,000 cash and $12,000 on account.

9. Paid $400 to suppliers for accounts payable due.

10. Received $3,000 from customers in payment of accounts receivable.

11. Received utility bills in the amount of $350, to be paid next month.

12. Paid the monthly salaries of the two employees, totalling $6,100.

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