Journal entries and trial balance On August 1, 20Y7, Rafael Masey established Planet Realty, which completed the following transactions during the month: a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $17,500. b. Purchased supplies on account, $2,300. c. Earned sales commissions, receiving cash, $13,300. d. Paid rent on office and equipment for the month, $3,000. e. Paid creditor on account, $1,150. f. Paid dividends, $1,800. g. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400. h. Paid office salaries, $2,800. i. Determined that the cost of supplies used was $1,050. Instructions 1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Journal entry explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of August 31, 20Y7. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for August. 5. Determine the increase or decrease in retained earnings for August.

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(1) To determine Journalize the transactions of Company R for the month of August. Explanation 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”. Journalize the transactions of Company R for the month of August. Date Description Post.Ref. Debit ($) Credit ($) 20Y7 a. Cash 17,500 August Common stock 17,500 (To record the issuance of common stock) b. Supplies 2,300 Accounts payable 2,300 (To record the purchase of supplies on account) c. Cash 13,300 Sales commission 13,300 (To record the receipt of sales commission) d. Rent expense 3,000 Cash 3,000 (To record the rent paid for the month) e... (2) To determine Prepare the T-accounts and post the respective journal entries. (3) To determine Prepare an unadjusted trial balance of Company R on August 31, 20Y7. (4) To determine Determine the following: (a) Amount of total revenue recorded in the ledger. (b) Amount of total expenses recorded in the ledger. (c) Amount of net income for August. (5) To determine Determine the increase or decrease in retained earnings for August.

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Financial And Managerial Accounting

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Financial And Managerial Accounting

15th Edition

WARREN + 1 other

Publisher: Cengage Learning,

ISBN: 9781337902663

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Section

Answer 3

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Answer 4

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Answer 5

(1)

To determine

Journalize the transactions of Company R for the month of August.

Explanation of Solution

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”.

Journalize the transactions of Company R for the month of August.

Date		Description	Post.Ref.	Debit ($)	Credit ($)
20Y7	a.	Cash		17,500
August		Common stock			17,500
		(To record the issuance of common stock)

	b.	Supplies		2,300
		Accounts payable			2,300
		(To record the purchase of supplies on account)

	c.	Cash		13,300
		Sales commission			13,300
		(To record the receipt of sales commission)

	d.	Rent expense		3,000
		Cash			3,000
		(To record the rent paid for the month)

	e...

Answer 6

(2)

To determine

Prepare the T-accounts and post the respective journal entries.

Answer 7

(3)

To determine

Prepare an unadjusted trial balance of Company R on August 31, 20Y7.

Answer 8

(4)

To determine

Determine the following:

(a) Amount of total revenue recorded in the ledger.
(b) Amount of total expenses recorded in the ledger.
(c) Amount of net income for August.

Answer 9

(5)

To determine

Determine the increase or decrease in retained earnings for August.

Financial And Managerial Accounting

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Financial And Managerial Accounting

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