Connect Access Card For Financial Accounting Fundamentals
Connect Access Card For Financial Accounting Fundamentals
7th Edition
ISBN: 9781260482829
Author: John J Wild
Publisher: McGraw-Hill Education
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 2, Problem 2AP

1.

To determine

Prepare the journal entries for the given transactions.

1.

Expert Solution
Check Mark

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

  • Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and equities.
  • Credit, all increase in liabilities, revenues, and equities, all decrease in assets, and expenses.

Prepare the journal entries for the given transactions as follows:

DateAccount Title and ExplanationPost Ref. Debit
($)
 Credit
($)
a.Cash101100,000
Office Equipment1635,000
Drafting Equipment16460,000
Common Stock307165,000
(To record owner invested cash and equipment for stock)
b.Land17249,000
Cash1016,300
Notes Payable25042,700
(To record purchase of  land in cash and on note payable)
c.Building17055,000
Cash10155,000
(To record building purchased in cash)
d.Prepaid Insurance1083,000
Cash1013,000
(To record 18-month insurance policy purchased in cash)
e.Cash1016,200
Engineering Fees Earned4026,200
(To record engineering fees earned from customer)
f.Drafting Equipment16420,000
Cash1019,500
Notes Payable25010,500
(To record purchase of  drafting equipment in cash and on note payable)
g.Accounts Receivable10614,000
Engineering Fees Earned40214,000
(To record engineering service performed on account)
h.Office Equipment1631,150
Accounts Payable2011,150
(To record equipment purchased on credit)
i.Accounts Receivable10622,000
Engineering Fees Earned40222,000
(To record engineering service performed on account)
j.Equipment Rental Expense6021,333
Accounts Payable2011,333
(To record equipment rental expense on account)
k.Cash1017,000
Accounts Receivable1067,000
(To record cash received from credit customer)
l.Wages Expense6011,200
Cash1011,200
(To record wages expense paid in cash)
m.Accounts Payable2011,150
Cash1011,150
(To cash paid to supplier)
n.Repairs Expense604925
Cash101925
(To record repair expense paid in cash)
o.Dividends3199,480
Cash1019,480
(To record dividend paid to investors)
p.Wages Expense6011,200
Cash1011,200
(To record  assistant’s wages paid in cash)
q.Advertising Expense6032,500
Cash1012,500
(To record advertising expense paid in cash)

Table (1)

2.

To determine

Post the journal entries to the general ledger accounts.

2.

Expert Solution
Check Mark

Explanation of Solution

Posting transactions:

The process of transferring the journalized transactions into the accounts of the ledger is known as posting the transactions.

Post the journal entries to the general ledger accounts as follows:

Cash No. 101
DatePR

 Debit

($)

 Credit
($)
 Balance
 ($)
(a)100,000100,000
(b)6,30093,700
(c)55,00038,700
(d)3,00035,700
(e)6,20041,900
(f)9,50032,400
(k)7,00039,400
(l)1,20038,200
(m)1,15037,050
(n)92536,125
(o)9,48026,645
(p)1,20025,445
(q)2,50022,945
Accounts Receivable No. 106
DatePR

 Debit

($)

 Credit
($)
 Balance
 ($)
(g)14,00014,000
(i)22,00036,000
(k)7,00029,000
Prepaid Insurance No. 108
DatePR

 Debit

($)

 Credit
($)
 Balance
 ($)
(d)3,0003,000
Office Equipment No. 163
DatePR

 Debit

($)

 Credit
($)
 Balance
 ($)
(a)5,0005,000
(h)1,1506,150
Drafting Equipment No. 164
DatePR

 Debit

($)

 Credit
($)
 Balance
 ($)
(a)60,00060,000
(f)20,00080,000
Building No. 170
DatePR

 Debit

($)

 Credit
($)
 Balance
 ($)
(c)55,00055,000
Land No. 172
DatePR

 Debit

($)

 Credit
($)
 Balance
 ($)
(b)49,00049,000
Accounts Payable No. 201
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(h)1,1501,150
(j)1,3332,483
(m)1,1501,333
Notes Payable No. 250
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(b)42,70042,700
(f)10,50053,200
Common Stock No. 307
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(a)165,000165,000
Dividends No. 319
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(o)9,4809,480
Engineering Fees Earned No. 402
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(e)6,2006,200
(g)14,00020,200
(i)22,00042,200
Wages Expense No. 601
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(l)1,2001,200
(p)1,2002,400
Equipment Rental Expense No. 602
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(j)1,3331,333
Advertising Expense No. 603
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(q)2,5002,500
Repairs Expense No. 604
DatePR Debit
($)
 Credit
($)
 Balance
 ($)
(n)925925

3.

To determine

Prepare a trial balance as of the end of June.

3.

Expert Solution
Check Mark

Explanation of Solution

Trial balance:

Trial balance is a summary of all the ledger accounts balances presented in a tabular form with two column, debit and credit. It checks the mathematical accuracy of the ledger postings and helps preparing the final accounts.

Prepare a trial balance as of the end of June as follows:

Company A
Trial Balance
June 30
ParticularsDebit ($)Credit ($)
Cash22,945
Accounts receivable29,000
Prepaid insurance3,000
Office equipment6,150
Drafting equipment80,000
Building55,000
Land49,000
Accounts payable1,333
Notes payable53,200
Common stock165,000
Dividends9,480
Engineering fees earned42,200
Wages expense2,400
Equipment rental expense1,333
Advertising expense2,500
Repairs expense925
Totals261,733261,733

Table (2)

Therefore, the total of debit, and credit columns of a trial balance is $261,733 and agree.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 2 Solutions

Connect Access Card For Financial Accounting Fundamentals

Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY