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Journal entries and trial balance On October 1, 2016, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct. 1. Jay transferred cash from a personal bank account to an account to be used for the business, $18,000. 4. Paid rent for period of October 4 to end of month, $3,000. 10. Purchased a used truck for $23,750, paying $3,750 cash and giving a note payable for the remainder. 13. Purchased equipment on account, $10,500. 14. Purchased supplies for cash, $2,100. 15. Paid annual premiums on property and casualty insurance, $3,600. 15. Received cash for job completed, $8,950. Enter the following transactions on Page 2 of the two-column journal: 21. Paid creditor a portion of the amount owed for equipment purchased on October 13, $2,000. 24. Recorded jobs completed on account and sent invoices to customers, $14,150. 26. Received an invoice for truck expenses, to be paid in November, $700. 27. Paid utilities expense, $2,240. Oct. 27. Paid miscellaneous expenses, $1,100. 29. Received cash from customers on account, $7,600. 30. Paid wages of employees, $4,800. 31. Withdrew cash for persona l use, $3,500. Instructions 1. Journalize each transaction in a two-column journal beginning 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.) Journal entry explanations may be omitted. 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Equipment 18 Truck 21 Notes Payable 22 Accounts Payable 31 Jay Pryor, Capital 32 Jay Pryor, Drawing 41 Fees Earned 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Truck Expense 59 Miscellaneous Expense 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2016. 4. Determine the excess of revenues over expenses for October. 5. Can you think of any reason why the amount determined in (4) might not be the net income for October?

BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615
BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615

Solutions

Chapter
Section
Chapter 2, Problem 2.3BPR
Textbook Problem

Journal entries and trial balance

On October 1, 2016, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:

Oct. 1. Jay transferred cash from a personal bank account to an account to be used for the business, $18,000.
4. Paid rent for period of October 4 to end of month, $3,000.
10. Purchased a used truck for $23,750, paying $3,750 cash and giving a note payable for the remainder.
13. Purchased equipment on account, $10,500.
14. Purchased supplies for cash, $2,100.
15. Paid annual premiums on property and casualty insurance, $3,600.
15. Received cash for job completed, $8,950.
Enter the following transactions on Page 2 of the two-column journal:
21. Paid creditor a portion of the amount owed for equipment purchased on October 13, $2,000.
24. Recorded jobs completed on account and sent invoices to customers, $14,150.
26. Received an invoice for truck expenses, to be paid in November, $700.
27. Paid utilities expense, $2,240.
Oct. 27. Paid miscellaneous expenses, $1,100.
29. Received cash from customers on account, $7,600.
30. Paid wages of employees, $4,800.
31. Withdrew cash for persona l use, $3,500.

Instructions

  1. 1. Journalize each transaction in a two-column journal beginning 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.) Journal entry explanations may be omitted.

    11 Cash

    12 Accounts Receivable

    13 Supplies

    14 Prepaid Insurance

    16 Equipment

    18 Truck

    21 Notes Payable

    22 Accounts Payable

    31 Jay Pryor, Capital

    32 Jay Pryor, Drawing

    41 Fees Earned

    51 Wages Expense

    53 Rent Expense

    54 Utilities Expense

    55 Truck Expense

    59 Miscellaneous Expense

  2. 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.
  3. 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2016.
  4. 4. Determine the excess of revenues over expenses for October.
  5. 5. Can you think of any reason why the amount determined in (4) might not be the net income for October?

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Chapter 2 Solutions

Accounting (Text Only)
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