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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Entries into T accounts and trial balance

Ken Jones, an architect, opened an office on April 1, 2016. During the month, he completed the following transactions connected with his professional practice:

  1. a. Transferred cash from a personal bank account to an account to be used for the business, $18,000.
  2. b. Purchased used automobile for $19,500, paying $2,500 cash and giving a note payable for the remainder.
  3. c. Paid April rent for office and workroom, $3,150.
  4. d. Paid cash for supplies, $1,450.
  5. e. Purchased office and computer equipment on account, $6,500.
  6. f. Paid cash for annual insurance policies on automobile and equipment, $2,400.
  7. g. Received cash from a client for plans delivered, $12,000.
  8. h. Paid cash to creditors on account, $1,800.
  9. i. Paid cash for miscellaneous expenses, $375.
  10. j. Received invoice for blueprint service, due in May, $2, 500.
  11. k. Recorded fees earned on plans delivered, payment to be received in May, $15,650.
  12. l. Paid salary of assistant, $2,800.
  13. m. Paid cash for miscellaneous expenses, $200.
  14. n. Paid installment due on note payable, $300.
  15. o. Paid gas, oil, and repairs on automobile for April, $550.

Instructions

  1. 1. Record these transactions directly in the following T accounts, without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Ken Jones, Capital; 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. 2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
  3. 3. Prepare an unadjusted trial balance for Ken Jones, Architect, as of April 30, 2016.
  4. 4. Determine the net income or net loss for April.

1, and 2.

To determine

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 trial balance:

The unadjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts before making adjusting journal entries.

To record: The transactions directly in their respective T-accounts, and to determine their balances.

Explanation

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

Cash
(a) 18,000 (b)2,500
(g)12,000 (c)3,150
(d)1,450
(f)2,400
(h)1,800
(i)375
(j)2,800
(m)200
(n) 300
(o) 550
Balance 14,475
Accounts Receivable
(k)15,650
Supplies
(d)1,450
Prepaid Insurance
(f)2,400
Automobiles
(b)19,500
Equipment
(e)6,500
...
Accounts Payable
(h) 1,800 (e)6,500

3.

To determine

To prepare: An unadjusted trial balance for Person KJ, Architect, as of April 30, 2016.

4.

To determine

The net income or net loss of Person KJ, Architect for the month of April.

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