(2) and (3)
Journal:
Journal is the book of original entry. Journal consists of the day today financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.
Rules of debit and credit:
“An increase in an asset account, an increase in an expense account, a decrease in liability account, and a decrease in a revenue account should be debited.
Similarly, an increase in liability account, an increase in a revenue account and a decrease in an asset account, a decrease in an expenses account should be credited”.
T-account:
An account is referred to as a T-account, because the alignment of the components of the account resembles the capital letter ‘T’. An account consists of the three main components which are as follows:
- The title of the account
- The left or debit side
- The right or credit side
Unadjusted
The unadjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts before making
To journalize: The transactions of July in a two column journal beginning on page 1.
(2) and (3)
Explanation of Solution
Journalize the transactions of July in a two column journal beginning on page 1.
Journal Page 1 | |||||
Date | Description | Post. Ref | Debit ($) | Credit ($) | |
2016 | Cash | 11 | 5,000 | ||
July | 1 | Common stock | 31 | 5,000 | |
(To record the exchange of common stock ) | |||||
1 | Office rent expense | 51 | 1,750 | ||
Cash | 11 | 1,750 | |||
(To record the payment of rent for the month of July) | |||||
1 | Prepaid insurance | 15 | 2,700 | ||
Cash | 11 | 2,700 | |||
(To record the payment of insurance premium) | |||||
2 | Cash | 11 | 1,000 | ||
Accounts receivable | 12 | 1,000 | |||
(To record the receipt of cash from customers) | |||||
3 | Cash | 11 | 7,200 | ||
Unearned revenue | 23 | 7,200 | |||
(To record the cash received for the service yet to be provide) | |||||
3 | Accounts payable | 21 | 250 | ||
Cash | 11 | 250 | |||
(To record the payment made to creditors on account) | |||||
4 | Miscellaneous expense | 59 | 900 | ||
Cash | 11 | 900 | |||
(To record the payment made for Miscellaneous expense) | |||||
5 | Office equipment | 17 | 7,500 | ||
Accounts payable | 21 | 7,500 | |||
(To record the purchase of equipment on account) | |||||
8 | Advertising expense | 55 | 200 | ||
Cash | 11 | 200 | |||
(To record the payment of advertising expense) | |||||
11 | Cash | 11 | 1,000 | ||
Fees earned | 41 | 1,000 | |||
(To record the receipt of cash) | |||||
13 | Equipment rent expense | 52 | 700 | ||
Cash | 11 | 700 | |||
(To record the payment made to equipment) | |||||
14 | Wages expense | 50 | 1,200 | ||
Cash | 11 | 1,200 | |||
(To record the payment of wages) |
Table (1)
Journal Page 2 | |||||
Date | Description | Post. Ref | Debit ($) | Credit ($) | |
2016 | 16 | Cash | 11 | 2,000 | |
July | Fees earned | 41 | 2,000 | ||
(To record the receipt of cash) | |||||
18 | Supplies | 14 | 850 | ||
Accounts payable | 21 | 850 | |||
(To record the purchase of supplies) | |||||
21 | Music expense | 54 | 620 | ||
Cash | 11 | 620 | |||
(To record the payment incurred for music) | |||||
22 | Advertising expense | 55 | 800 | ||
Cash | 11 | 800 | |||
(To record the payment of advertising expense) | |||||
23 | Cash | 11 | 750 | ||
Accounts receivable | 12 | 1,750 | |||
Fees earned | 41 | 2,500 | |||
(To record the receipt of cash for the service performed party for cash and party on account) | |||||
27 | Utilities expense | 53 | 915 | ||
Cash | 11 | 915 | |||
(To record the payment of electricity) | |||||
28 | Wages expense | 50 | 1,200 | ||
Cash | 11 | 1,200 | |||
(To record the payment made for salary and commission expense) | |||||
29 | Miscellaneous expense | 59 | 540 | ||
Cash | 11 | 540 | |||
(To record the revenue earned and billed) | |||||
30 | Cash | 11 | 500 | ||
Accounts receivable | 12 | 1,000 | |||
Fees earned | 41 | 1,500 | |||
(To record the purchase of land party for cash and party on signing a note) | |||||
31 | Cash | 11 | 3,000 | ||
Fees earned | 41 | 3,000 | |||
(To record the receipt of cash) | |||||
31 | Music expense | 54 | 1,400 | ||
Cash | 11 | 620 | |||
(To record the payment incurred for music) | |||||
31 | Dividends | 33 | 1,250 | ||
Cash | 11 | 1,250 | |||
(To record the withdrawal of cash for personal use) |
Table (2)
(1) and (3)
To record: The balance of each accounts in the appropriate balance column of a four-column account and post them to the ledger.
(1) and (3)
Explanation of Solution
Account: Cash Account no. 11 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 3,920 | |||
1 | 1 | 5,000 | 8,920 | ||||
1 | 1 | 1,750 | 7,170 | ||||
1 | 1 | 2,700 | 4,470 | ||||
2 | 1 | 1,000 | 5,470 | ||||
3 | 1 | 7,200 | 12,670 | ||||
3 | 1 | 250 | 12,420 | ||||
4 | 1 | 900 | 11,520 | ||||
8 | 1 | 200 | 11,320 | ||||
11 | 1 | 1,000 | 12,320 | ||||
13 | 1 | 700 | 11,620 | ||||
14 | 1 | 1,200 | 10,420 | ||||
16 | 2 | 2,000 | 12,420 | ||||
21 | 2 | 620 | 11,800 | ||||
22 | 2 | 800 | 11,000 | ||||
23 | 2 | 750 | 11,750 | ||||
27 | 2 | 915 | 10,835 | ||||
28 | 2 | 1,200 | 9,635 | ||||
29 | 2 | 540 | 9,095 | ||||
30 | 2 | 500 | 9,595 | ||||
31 | 2 | 3,000 | 12,595 | ||||
31 | 2 | 1,400 | 11,195 | ||||
31 | 2 | 1,250 | 9,945 |
Table (3)
Account: Accounts Receivable Account no. 12 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 1,000 | |||
2 | 1 | 1,000 | – | – | |||
23 | 2 | 1,750 | 1,750 | ||||
30 | 2 | 1,000 | 2,750 |
Table (4)
Account: Supplies Account no. 14 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 170 | |||
18 | 2 | 850 | 1,020 |
Table (5)
Account: Prepaid Insurance Account no. 15 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 | 1 | 2,700 | 2,700 |
Table (6)
Account: Office equipment Account no. 17 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 5 | 1 | 7,500 | 7,500 |
Table (7)
Account: Accounts Payable Account no. 21 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 250 | |||
3 | 1 | 250 | – | – | |||
5 | 1 | 7,500 | 7,500 | ||||
18 | 2 | 850 | 8,350 |
Table (8)
Account: Unearned Revenue Account no. 23 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 3 | 1 | 7,200 | 7,200 |
Table (9)
Account: Common stock Account no. 31 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 4000 | |||
1 | 1 | 5,000 | 9,000 |
Table (10)
Account: Dividends Account no. 33 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 500 | |||
31 | 2 | 1,250 | 1,750 |
Table (11)
Account: Fees earned Account no. 41 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 6,200 | |||
11 | 1 | 1,000 | 7,200 | ||||
16 | 2 | 2,000 | 9,200 | ||||
23 | 2 | 2,500 | 11,700 | ||||
30 | 2 | 1,500 | 13,200 | ||||
31 | 2 | 3,000 | 16,200 |
Table (12)
Account: Wages expense Account no. 50 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 400 | |||
14 | 1 | 1,200 | 1,600 | ||||
28 | 2 | 1,200 | 2,800 |
Table (13)
Account: Office rent expense Account no. 51 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 800 | |||
1 | 1 | 1,750 | 2,550 |
Table (14)
Account: Equipment rent expense Account no. 52 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 675 | |||
13 | 1 | 700 | 1,375 |
Table (15)
Account: Utility expense Account no. 53 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 300 | |||
27 | 2 | 915 | 1,215 |
Table (16)
Account: Music expense Account no. 54 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 1,590 | |||
21 | 2 | 620 | 2,210 | ||||
31 | 2 | 1,400 | 3,610 |
Table (17)
Account: Advertising expense Account no. 55 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 500 | |||
8 | 1 | 200 | 700 | ||||
22 | 2 | 800 | 1,500 |
Table (18)
Account: Supplies expense Account no. 56 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 180 |
Table (19)
Account: Miscellaneous expense Account no. 59 | |||||||
Date | Item | Post. Ref |
Debit ($) |
Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
July | 1 |
|
✓ | 415 | |||
4 | 1 | 900 | 1,315 | ||||
29 | 2 | 540 | 1,855 |
Table (20)
(4)
To prepare: An unadjusted trial balance of Company PS Music at July 31, 2016.
(4)
Explanation of Solution
Prepare an unadjusted trial balance of Company PS Music at July 31, 2016 as follows:
PS Music Unadjusted Trial Balance July 31, 2016 |
|||
Particulars | Account No. |
Debit $ | Credit $ |
Cash | 11 | 9,945 | |
Accounts receivable | 12 | 2,750 | |
Supplies | 14 | 1,020 | |
Prepaid insurance | 15 | 2,700 | |
Office Equipment | 17 | 7,500 | |
Accounts payable | 21 | 8,350 | |
Unearned revenue | 23 | 7,200 | |
Common Stock | 31 | 9,000 | |
Dividends | 33 | 1,750 | |
Fees earned | 41 | 16,200 | |
Wages expense | 50 | 2,800 | |
Office Rent expense | 51 | 2,550 | |
Equipment Rent expense | 52 | 1,375 | |
Utilities expense | 53 | 1,215 | |
Music expense | 54 | 3,610 | |
Advertising expense | 55 | 1,500 | |
Supplies expense | 56 | 180 | |
Miscellaneous expense | 59 | 1,855 | |
Total | 40,750 | 40,750 |
Table (21)
The debit column and credit column of the unadjusted trial balance are agreed, both having balance of $40,750.
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Chapter 2 Solutions
Financial & Managerial Accounting
- The transactions completed by PS Music during June 20Y5 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1. Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing 5,000 in PS Musics checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 14. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 20Y5. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 20Y5. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31. Paid dividends, 1,250. PS Musics chart of accounts and the balance of accounts as of July 1, 20Y5 (all normal balances), are as follows: Instructions 1. Enter the July 1, 20Y5, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 20Y5.arrow_forwardThe transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1.Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Musics checking account. 1.Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1.Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2.Received 1,000 cash from customers on account. 3.On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3.Paid 250 to creditors on account. 4.Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5.Purchased office equipment on account from Office Mart, 7,500. 8.Paid for a newspaper advertisement, 200. 11.Received 1,000 for serving as a disc jockey for a party. 13.Paid 700 to a local audio electronics store for rental of digital recording equipment. 14.Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16.Received 2,000 for serving as a disc jockey for a wedding reception. 18.Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22.Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23.Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27.Paid electric bill, 915. 28.Paid wages of 1,200 to receptionist and part-time assistant. 29.Paid miscellaneous expenses, 540. 30.Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31.Withdrew 1,250 cash from PS Music for personal use. PS Musics chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2019.arrow_forwardThe transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music: store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for SO hours per month for a monthly fee of 3,600. Any additional hours beyond SO will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 to creditors on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 11. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew l,250 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts receivable 1,000 14 Supplies 170 15 Prepaid insurance 17 Office Equipment 21 Accounts payable 250 23 Unearned Revenue 31 Peyton smith, Drawing 4,000 32 Fees Earned 500 41 Wages Expense 6,200 50 Office Rent Expense 400 51 Equipment Rent Expense 800 52 Utilities Expense 675 53 Supplies Expense 300 54 music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1.Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2.Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4.Prepare an unadjusted trial balance as of July 31, 2019.arrow_forward
- In July of this year, M. Wallace established a business called Wallace Realty. The account headings are presented below. Transactions completed during the month follow. a. Wallace deposited 24,000 in a bank account in the name of the business. b. Paid the office rent for the current month, 650, Ck. No. 1000. c. Bought office supplies for cash, 375, Ck. No. 1001. d. Bought office equipment on account from Dellos Computers, 6,300. e. Received a bill from the City Crier for advertising, 455. f. Sold services for cash, 3,944. g. Paid on account to Dellos Computers, 1,500, Ck. No. 1002. h. Received and paid the bill for utilities, 340, Ck. No. 1003. i. Paid on account to the City Crier, 455, Ck. No. 1004. j. Paid truck expenses, 435, Ck. No. 1005. k. Wallace withdrew cash for personal use, 1,500, Ck. No. 1006. Required 1. Record the transactions and the balance after each transaction. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forwardFor the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2016, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the following transactions during July: Instructions 1.Journalize each transaction in a two-column journal starting on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) 2.Post the journal to a ledger of four-column accounts. 3.Prepare an unadjusted trial balance. 4.At the end of July, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a. Insurance expired during July is 375. b. Supplies on hand on July 31 are 1,525. c. Depreciation of office equipment for July is 750. d. Accrued receptionist salary on July 31 is 175. e. Rent expired during July is 2,400. f. Unearned fees on July 31 are 2,750. 5.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6.Journalize and post the adjusting entries. Record the adjusting entries on Page 3 of the journal. 7.Prepare an adjusted trial balance. 8.Prepare an income statement, a statement of owners equity, and a balance sheet. 9.Prepare and post the closing entries. (Income Summary is account #33 in the chart of accounts.) Record the closing entries on Page 4 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10.Prepare a post-closing trial balance.arrow_forwardDuring December of this year, G. Elden established Ginnys Gym. The following asset, liability, and owners equity accounts are included in the chart of accounts: During December, the following transactions occurred: a. Elden deposited 35,000 in a bank account in the name of the business. b. Bought exercise equipment for cash, 8,150, Ck. No. 1001. c. Bought advertising on account from Hazel Company, 105. d. Bought a display rack on account from Cyber Core, 790. e. Bought office equipment on account from Office Aids, 185. f. Elden invested her exercise equipment with a fair market value of 1,200 in the business. g. Made a payment to Cyber Core, 200, Ck. No. 1002. h. Sold services for the month of December for cash, 800. Required 1. Write the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, as well as the plus and minus signs and Debit and Credit. 2. Write the account names on the T accounts under the classifications, place the plus and minus signs for each T account, and label the debit and credit sides of the T accounts 3. Record the amounts in the proper positions in the T accounts. Write the letter next to each entry to identify the transaction. 4. Foot and balance the accounts.arrow_forward
- In October, A. Nguyen established an apartment rental service. The account headings are presented below. Transactions completed during the month of October follow. a. Nguyen deposited 25,000 in a bank account in the name of the business. b. Paid the rent for the month, 1,200, Ck. No. 2015. c. Bought supplies on account, 225. d. Bought a truck for 18,000, paying 1,000 in cash and placing the remainder on account e. Bought Insurance for the truck for the yean 1,400, Ck. No. 2016. f. Sold services on account 5,000. g. Bought office equipment on account from Henry Office Supply, 2,300. h. Sold services for cash for the first half of the month, 6,050. i. Received and paid the bill for utilities, 150, Ck. No. 2017. j. Received a bill for gas and oil for the truck. 80. k. Paid wages to the employees, 1,400, Ck Nos. 20182020. l. Sold services for cash for the remainder of the month, 4,200. m. Nguyen withdrew cash for personal use, 2,000, Ck. No. 2021. Required 1. Record the transactions and the balance after each transaction. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, reanalyze each transaction.arrow_forwardOn March 1 of this year, B. Gervais established Gervais Catering Service. The account headings are presented below. Transactions completed during the month follow. a. Gervais deposited 25,000 in a bank account in the name of the business. b. Bought a truck from Kelly Motors for 26,329, paying 8,000 in cash and placing the balance on account, Ck. No. 500. c. Bought catering equipment on account from Luigis Equipment, 3,795. d. Paid the rent for the month, 1,255, Ck. No. 501. e. Bought insurance for the truck for one year, 400, Ck. No. 502. f. Sold catering services for cash for the first half of the month, 3,012. g. Bought supplies for cash, 185, Ck. No. 503. h. Sold catering services on account, 4,307. i. Received and paid the heating bill, 248, Ck. No. 504. j. Received a bill from GC Gas and Lube for gas and oil for the truck, 128. k. Sold catering services for cash for the remainder of the month, 2,649. l. Gervais withdrew cash for personal use, 1,550, Ck. No. 505. m. Paid the salary of the assistant, 1,150, Ck. No. 506. Required 1. Record the transactions and the balance after each transaction. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forward
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