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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
ISBN: 9781337902663

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BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
ISBN: 9781337902663
Textbook Problem

Entries into T accounts and trial balance

Ken Jones, an architect, organized Jones Architects on April 1, 20Y2. During the month, Jones Architects completed the following transactions:

a. Transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $18,000.

b. Purchased used automobile for $19,500, paying $2,500 cash and giving a note payable for the remainder.

c. Paid April rent for office and workroom, $3,150.

d. Paid cash for supplies, $1,450.

e. Purchased office and computer equipment on account, $6,500.

f. Paid cash for annual insurance policies on automobile and equipment, $2,400.

g. Received cash from a client for plans delivered, $12,000.

h. Paid cash to creditors on account, $1,800.

i. Paid cash for miscellaneous expenses, $375.

j. Received invoice for blueprint service, due in May, $2,500.

k. Recorded fees earned on plans delivered, payment to be received in May, $15,650.

l. Paid salary of assistant, $2,800.

m. Paid cash for miscellaneous expenses, $200.

n. Paid installment due on note payable, $300.

o. Paid gas, oil, and repairs on automobile for April, $550.

Instructions

1. Record these transactions directly in the following T accounts, without journalizing: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes Payable, Accounts Payable, Common Stock, Professional Fees, Rent Expense, Salary Expense, Blueprint Expense, Automobile Expense, Miscellaneous Expense. To the left of each amount entered in the accounts, place the appropriate letter to identify the transaction.

2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.

3. Prepare an unadjusted trial balance for Jones Architects as of April 30, 20Y2.

4. Determine the net income or net loss for April.

(1) and (2)

To determine

Record the transactions directly in the respective T-accounts, and determine their balances.

Explanation

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...

(3)

To determine

Prepare an unadjusted trial balance for Company JA, as of April 30, 20Y2.

(4)

To determine

Determine the net income or net loss for Company JA for the month of April.

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