Concept explainers
1.
Introduction:
To prepare: The general journal entries for the following transaction.
1.
Explanation of Solution
Journal entries of KT for the month of April are shown below.
Date | Particular | PR | Dr.$ | Cr.$ |
a. | Cash | 101 | 65,000 | |
Office equipment | 163 | 5750 | ||
Computer equipment | 164 | 30,000 | ||
To Common stock | 307 | 100,750 | ||
(Owner’s investment) | ||||
b. | Land | 172 | 22,000 | |
Cash | 101 | 5000 | ||
Note payable | 250 | 17,000 | ||
(To record land purchase) | ||||
c. | Building | 170 | 34,500 | |
Cash | 101 | 34,500 | ||
(building purchased on cash) | ||||
d. | Prepaid Insurance | 108 | 5000 | |
Cash | 101 | 5000 | ||
(Insurance premium paid) | ||||
e. | Cash | 4600 | ||
Fees earned | 4600 | |||
(received cash for service provided) | ||||
f. | Computer equipment | 164 | 4500 | |
Cash | 101 | 800 | ||
Note payable | 250 | 3700 | ||
(purchase of computer equipment by paying cash and signing notes payable) | ||||
g. | Account receivable | 106 | 4250 | |
Fees earned | 402 | 4250 | ||
(service provided on credit) | ||||
h. | Office equipment | 163 | 950 | |
Account payable | 201 | 950 | ||
(purchase of office equipment on credits) | ||||
i. | Account receivable | 106 | 10,200 | |
Fees earned | 402 | 10,200 | ||
(service provided on credit) | ||||
j. | Equipment rental expense | 602 | 580 | |
Account payable | 580 | |||
(equipment rental cost is due) | ||||
101 | 5100 | |||
k. | Cash | 106 | 5100 | |
Account receivable | ||||
(cash received from client ) | ||||
l. | Wages expense | 601 | 1800 | |
cash | 101 | 1800 | ||
(cash paid for wages) | ||||
m. | Account payable | 201 | 950 | |
cash | 101 | 950 | ||
(cash paid that was due) | ||||
n. | Repair Expense | 604 | 608 | |
Cash | 106 | 608 | ||
(paid cash for repair equipment) | ||||
o. | Dividends | 319 | 6230 | |
Cash | 101 | 6230 | ||
(dividend paid on cash) | ||||
p. | Wages | 601 | 1800 | |
Cash | 101 | 1800 | ||
(wages paid by cash) | ||||
q. | Advertisement | 603 | 750 | |
Cash | 101 | 750 | ||
(paid cash for advertisement) | ||||
2.
Introduction: Journal entry is a technique of booking and recording financial transactions on any company. Ledger is used to record all economic transactions of the account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.
To prepare: T account for the following transactions.
2.
Answer to Problem 2PSB
Balance of T account for cash $17,262, account receivable $9350, office equipment$6700, Building $434500, office supplies $500, note payable $20700, Account payable $580, utilities $540, Common stock $100750, dividend $6230, fees earned $19050, wages expense$3600, Land $22000, computer equipment 34500, equipment rental expense 580, repair expense $608 and advertisement expense $750
Explanation of Solution
Cash Account No.101 | ||||
Date | PR | Debit $ | Credit $ | Balance$ |
a. | 65,000 | 65,000 | ||
b. | 5000 | 60,000 | ||
c. | 34,500 | 25,500 | ||
d. | 5000 | 20,500 | ||
e. | 4600 | 25,100 | ||
f. | 800 | 24,300 | ||
k. | 5100 | 29,400 | ||
l. | 1800 | 27,600 | ||
m. | 950 | 26,650 | ||
n | 608 | 26,042 | ||
o. | 6230 | 19,812 | ||
p. | 1800 | 18,012 | ||
q. | 750 | 17,262 |
Accounts Receivable | Account no. 106 | |||
Date | PR | Debit ($) | Credit($) | Balance($) |
g. | 4250 | 4,250 | ||
i. | 10200 | 14,450 | ||
k. | 5100 | 9,350 | ||
Prepaid insurance | Account no.108 | |||
Date | PR | Debit | Credit | Balance |
d. | 5000 | 5000 |
Office equipment | Account no. 163 | |||
Date | PR | Debit | Credit | Balance |
a. | 5750 | 5750 | ||
h | 950 | 6700 | ||
Computer equipment | Account no. 164 | |||
Date | PR | Debit | Credit | Balance |
a. | 30,000 | 30,000 | ||
f. | 4500 | 34,500 |
Building | Account no. 170 | |||
Date | PR | Debit | Credit | Balance |
c. | 34,500 | 34,500 | ||
land | Account no. 201 | |||
Date | PR | Debit | Credit | Balance |
c. | 22000 | 22,000 |
Account payable | Account no. 201 | |||
Date | PR | Debit | Credit | Balance |
h. | 950 | 950 | ||
j. | 580 | 1530 | ||
950 | 580 |
Note payable | Account no. 307 | |||
Date | PR | Debit | Credit | Balance |
a. | 17000 | 17,000 | ||
d. | 3700 | 20,700 |
Common stock | Account no. 307 | |||
Date | PR | Debit | Credit | Balance |
h. | 100,750 | 100,750 | ||
Dividend | Account no. 319 | |||
Date | PR | Debit | Credit | Balance |
o. | 6230 | 6230 |
Fees Earned | Account no. 402 | |||
Date | PR | Debit | Credit | Balance |
e. | 4600 | 4600 | ||
G | 4250 | 8850 |
Equipment rental | Account no. 172 | |||
Date | PR | Debit | Credit | Balance |
b. | 580 | 580 |
Wages Expense | Account no. 601 | |||
Date | PR | Debit | Credit | Balance |
l. | 1800 | 1800 | ||
p. | 1800 | 3600 | ||
Repair expense | Account no. 604 | |||
Date | PR | Debit | Credit | Balance |
n. | 608 | 608 |
Advertisement expense | Account no. 106 | |||
Date | PR | Debit | Credit | Balance |
q. | 750 | 750 |
3.
Introduction: Journal entry is a technique of booking and recording financial transactions on any company. Ledger is used to record all economic transactions of the account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.
To prepare: Trail balance.
3.
Answer to Problem 2PSB
Total of trail balance is $141,080.
Explanation of Solution
NTrail balance | ||
Particular | Dr. | Cr. |
Cash | 17,262 | |
Account receivable | 9,350 | |
Prepaid insurance | 5,000 | |
Office equipment | 6,700 | |
Computer equipment | 34,500 | |
Building | 34,500 | |
Land | 22,000 | |
Account payable | 580 | |
Notes payable | 20,700 | |
Common stock | 100,750 | |
Dividends | 6230 | |
Fees earned | 19,050 | |
Equipment on rental | 580 | |
Wages Expense | 3600 | |
repair expense | 608 | |
Advertisement Expense | 750 | |
Total | 141,080 | 141,080 |
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Chapter 2 Solutions
FINANCIAL ACCT: INFORMATION LL +CNCT ACC
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- During December of this year, G. Elden established Ginnys Gym. The following asset, liability, and owners equity accounts are included in the chart of accounts: During December, the following transactions occurred: a. Elden deposited 35,000 in a bank account in the name of the business. b. Bought exercise equipment for cash, 8,150, Ck. No. 1001. c. Bought advertising on account from Hazel Company, 105. d. Bought a display rack on account from Cyber Core, 790. e. Bought office equipment on account from Office Aids, 185. f. Elden invested her exercise equipment with a fair market value of 1,200 in the business. g. Made a payment to Cyber Core, 200, Ck. No. 1002. h. Sold services for the month of December for cash, 800. Required 1. Write the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, as well as the plus and minus signs and Debit and Credit. 2. Write the account names on the T accounts under the classifications, place the plus and minus signs for each T account, and label the debit and credit sides of the T accounts 3. Record the amounts in the proper positions in the T accounts. Write the letter next to each entry to identify the transaction. 4. Foot and balance the accounts.arrow_forwardDuring February of this year, H. Rose established Rose Shoe Hospital. The following asset, liability, and owners equity accounts are included in the chart of accounts: The following transactions occurred during the month of February: a. Rose deposited 25,000 cash in a bank account in the name of the business. b. Bought shop equipment for cash, 1,525, Ck. No. 1000. c. Bought advertising on account from Milland Company, 325. d. Bought store shelving on account from Inger Hardware, 750. e. Bought office equipment from Sharas Office Supply, 625, paying 225 in cash and placing the balance on account, Ck. No. 1001. f. Paid on account to Inger Hardware, 750, Ck. No. 1002. g. Rose invested his personal leather working tools with a fair market value of 800 in the business h. Sold services for the month of February for cash, 250. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions Required 1. Write the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, as well as the plus and minus signs and Debit and Credit. 2. Write the account names on the T accounts under the classifications, place the plus and minus signs for each T account, and label the debit and credit sides of the T accounts. 3. Record the amounts in the proper positions in the T accounts. Write the letter next to each entry to identify the transaction. 4. Foot and balance the accounts.arrow_forwardIn March, T. Carter established Carter Delivery Service. The account headings are presented below. Transactions completed during the month of March follow. a. Carter deposited 25,000 in a bank account in the name of the business. b. Bought a used truck from Degroot Motors for 15,140, paying 5,140 in cash and placing the remainder on account. c. Bought equipment on account from Flemming Company, 3,450. d. Paid the rent for the month, 1,000, Ck. No. 3001. e. Sold services for cash for the first half of the month, 6,927. f. Bought supplies for cash, 301, Ck. No. 3002. g. Bought insurance for the truck for the year, 1,200, Ck. No. 3003. h. Received and paid the bill for utilities, 349, Ck. No. 3004. i. Received a bill for gas and oil for the truck, 218. j. Sold services on account, 3,603. k. Sold services for cash for the remainder of the month, 4,612. l. Paid wages to the employees, 3,958, Ck. Nos. 30053007. m. Carter withdrew cash for personal use, 1,250, Ck. No. 3008. Required 1. Record the transactions and the balance after each transaction 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forward
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