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Mr. Smith is opening his own automotive collision repair shop where he will fix wrecked vehicles. He knows he will have direct materials costs for any parts and paint he has to order to repair and paint the vehicles. Mr. Smith does not know how to account for the repair jobs he performs.

As Mr. Smith is in a service organization, he will not have raw materials, work-in-process, or finished good inventory accounts as a manufacturing company would. Some service companies do not use a work-in-process accounts but instead simply charge costs directly to expense accounts, which Mr. Smith has opted to do for simplicity.

How does Mr. Smith account for the following? Create journal entries with explanations for each transaction.:

1. Purchased parts for a specific repair job (Job Number: 0123) on account.

2. Purchased paint for a specific repair job (Job Number: 0145) with cash.

3. Purchased detailing supplies on account. (This includes glass cleaner, wax, tire shine. To be used for any detailing work Mr. Smith will perform in addition to collision repair jobs, but will not be allocated to specific repair jobs.)

4. Purchased vehicle repair supplies on account. (This includes sanding pads, primer, putty, etc. To be used for Mr. Smiths collision repair jobs, but will not be allocated to specific jobs.)

5. Mr. Smith is paid a salary as the owner of his business and the sole employee. Record Mr. Smiths salary in the amount of $1,250.

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