Journal entry is an entry to journal account which records the accounting transactions in a chronological order.
1.
To prepare: Journal entry for October transactions.
Explanation of Solution
Journal entries to record the transactions
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 1 | Cash | 45,000 | ||
Office Equipment | 8,000 | |||
Computer Equipment | 20,000 | |||
Capital account | 73,000 | |||
( Being cash and equipment has been invested by the owner.) |
Table (1)
- Cash and all the equipment has been converted into capital to invest in the business so the entire amount has been debited
- Amount invested in the business is actually generated from all the cash and equipment and owner invested the entire amount in business so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 2 | Prepaid rent | 3,300 | ||
Cash | 3,300 | |||
( Being 4 months’ rent has been paid in advance.) |
Table (2)
- Prepaid belongs to asset accounts it has been debited as its payment resulted in increase in assets.
- Cash is an asset account it has been credited for the payment of rent as it resulted in decrease in asset account.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 3 | Computer Supplies | 1,420 | ||
Account payable | 1,420 | |||
( Being computer supplies has been purchased for credit.) |
Table (3)
- Computer supplies belong to asset accounts it has been debited as their purchase resulted in increase in assets.
- Accounts payable is a liability account it has been credited for the purchase of supplies as it resulted in increase in liability account.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 5 | Prepaid Insurance | 2,220 | ||
Cash | 2,220 | |||
( Being premium of 12 months for insurance has been paid in advance) |
Table (4)
- Prepaid expense belongs to asset account so there is an increase in asset account so it is debited.
- While cash is also a part of asset account it is credited because there is decrease in cash account for the payment of premium.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 6 | Account receivable | 4,800 | ||
Services revenue | 4,800 | |||
( Being customer billed for providing services.) |
Table (5)
- Account receivable is belonging to asset so providing services on crdit causes increase in asset account so debited.
- Services have been provided so it recorded in credited account.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 8 | Accounts payable | 1,420 | ||
Cash | 1,420 | |||
( Being paid balance due on account payable) |
Table (6)
- Paid the balance for computer supplies that were purchased on credit. Since the liability is decreased so accounts payable account is debited.
- Cash is an asset account it has been credited for the payment of computer supplies as it resulted in decrease in asset account so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 12 | Accounts receivable | 1,400 | ||
Service Revenue | 1,400 | |||
( Being customer billed for providing services.) |
Table (7)
- Account receivable is debited as it is a current asset account so it will give rise to the asset account.
- Services have been provided but cash not received as the money would be received later on so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 15 | Cash | 4,800 | ||
Accounts receivable | 4,800 | |||
( Being amount received for credit services.) |
Table (8)
- Cash is an asset account it is debited because receiving cash for previously providing services will increase asset account.
- While accounts receivable is also an asset account so receiving credit money will decrease it so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 17 | Repairs expense | 805 | ||
Cash | 805 | |||
( Being amount paid for incurring repair) |
Table (9)
- Repairs are expense and increase in expense account is debited.
- Cash is an asset account using cash for repairs will decrease asset account so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 20 | Advertising expense | 1,728 | ||
Cash | 1,728 | |||
( Being rented on credit.) |
Table (10)
- Advertising is an expense and increase in expense account is debited.
- Cash is an asset account using cash for advertising will decrease asset account so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 22 | Cash | 1,400 | ||
Account Receivable | 1,400 | |||
( Being cash for previously provided services) |
Table (11)
- Cash account is an asset account. Since cash is earned, so it is to be increased. Therefore, cash account is to be debited.
- Account receivable is belonging to asset account so receiving amount which was due will decrease it so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 28 | Account receivable | 5,208 | ||
Service revenue | 5,208 | |||
( Being customer billed for providing services.) |
Table (12)
- Account receivable is debited as it is a current asset account so it will give rise to the asset account.
- Services have been provided but cash not received as the money would be received later on so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 31 | Wages expense | 875 | ||
Cash | 875 | |||
( Being wages paid on cash for part time work ) |
Table (13)
- Wages expense account is an expense account. Since wages expense is increased, expense is to be increased. So, debit the wages expense account.
- Cash account is an asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Oct 31 | Dividends | 3,600 | ||
Cash | 3,600 | |||
( Being cash is paid in form of dividend.) |
Table (14)
- Since dividends has been paid and it will decrease equity so debited
- Cash is credited as dividends have been paid in cash which decrease the account so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 1 | Mileage Expense | 320 | ||
Cash | 320 | |||
( Being mileage expense paid on cash) |
Table (15)
- Mileage expense is an expense account. Since mileage expense is increased, expense is to be increased. So, debit the mileage expense account.
- Cash account is an asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 2 | Cash | 4,633 | ||
Service revenue | 4,633 | |||
( Being cash received for providing services.) |
Table (16)
- Being cash received for the services which has been provided earlier so debited as it will increase asset account.
- Since there is a decrease in account receivable for the services which was provide earlier so it is credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 5 | Computer Supplies | 1,125 | ||
Cash | 1,125 | |||
( Being purchase of computer supplies for cash.) |
Table (17)
- Computer supplies belong to asset accounts it has been debited as their purchase resulted in increase in assets.
- Cash account is an asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 8 | Account receivable | 5,668 | ||
Service revenue | 5,668 | |||
( Being customer billed for providing services.) |
Table (18)
- Account receivable is debited as it is a current asset account so it will give rise to the asset account.
- Services have been provided but cash not received as the money would be received later on so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 18 | Cash | 2,208 | ||
Account receivable | 2,208 | |||
( Being cash received for previously provided services) |
Table (19)
- Cash account is an asset account. Since cash is earned, so it is to be increased. Therefore, cash account is to be debited.
- Account receivable is belonging to asset account so receiving amount which was due will decrease it so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 22 | Miscellaneous Expense | 250 | ||
Cash | 250 | |||
( Being miscellaneous expense paid on cash) |
Table (20)
- Miscellaneous expense is an expense account. Since miscellaneous expense is increased, expense is to be increased. So, debit the miscellaneous expense account.
- Cash account is an asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 24 | Account receivable | 3,950 | ||
Service revenue | 3,950 | |||
( Being customer billed for providing services.) |
Table (21)
- Account receivable is debited as it is a current asset account so it will give rise to the asset account.
- Services have been provided but cash not received as the money would be received later on so credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 28 | Mileage expenses | 384 | ||
Cash | 384 | |||
( Being cash paid for expenses occurred.) |
Table (22)
- Mileage expense is an expense account. Since mileage expense is increased, expense is to be increased. So, debit the mileage expense account.
- Cash account is an asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 30 | Wages expenses | 1,750 | ||
Cash | 1,750 | |||
( Being salary paid to part time worker) |
Table (23)
- Wages expense is an expense account. Since Wages expense is increased, expense is to be increased. So, debit the wages expense account.
- Cash account is an asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Nov 30 | Dividends | 2,000 | ||
Cash | 2,000 | |||
( Being cash is paid in form of dividend.) |
Table (24)
- Since dividends has been paid and it will decrease equity so debited
- Cash is credited as dividends have been paid in cash which decrease the account so credited.
2.
To prepare: Ledger account.
2.
Explanation of Solution
Cash | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 1 | Capital | 45,000 | 45,000 | ||
Oct 2 | Prepaid rent | 3,330 | 41,700 | ||
Oct 5 | Prepaid Insurance | 2,220 | 39,480 | ||
Oct 8 | Account Payable | 1,420 | 38,060 | ||
Oct 15 | Account receivables | 4,800 | 42,860 | ||
Oct 17 | Repair Expense | 805 | 42,055 | ||
Oct 20 | Advertising Expense | 1,728 | 40,327 | ||
Oct 22 | Account receivables | 1,400 | 41,727 | ||
Oct 31 | Wages | 875 | 40,852 | ||
Oct 31 | Dividends | 3,600 | 37,252 | ||
Nov 1 | Mileage Expense | 320 | 36,932 | ||
Nov 2 | Computer service revenue | 4,633 | 41,565 | ||
Nov 5 | Computer Supplies | 1,125 | 40,440 | ||
Nov 18 | Account receivables | 2,208 | 42,648 | ||
Nov 22 | Miscellaneous Expense | 250 | 42,398 | ||
Nov 28 | Mileage Expense | 384 | 42,014 | ||
Nov 30 | Wages expense | 1,750 | 40,264 | ||
Nov 30 | Dividends | 2,000 | 38,264 |
Table (25)
So the ending balance is $38,264
Account receivable | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 6 | Computer service revenue | 4,800 | 4,800 | ||
Oct 12 | Computer service revenue | 1,400 | 6,200 | ||
Oct 15 | Cash | 4,800 | 1,400 | ||
Oct 22 | Cash | 1,400 | 0 | ||
Oct 28 | Computer service revenue | 5,208 | 5,208 | ||
Nov 8 | Computer service revenue | 5,668 | 10,876 | ||
Nov 18 | Cash | 2,208 | 8,668 | ||
Nov 24 | Computer service revenue | 3,950 | 12,618 |
Table (26)
So the ending balance is $12,618
Prepaid Insurance | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 5 | Cash | 2,220 | 2,220 |
Table (27)
So the ending balance is $2,220
Office Equipment | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 1 | Cash | 8,000 | 8,000 |
Table (28)
So the ending balance is $8,000
Computer Equipment | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 1 | Cash | 20,000 | 20,000 |
Table (29)
So the ending balance is $20,000
Prepaid Rent | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 2 | Cash | 3,300 | 3,300 |
Table (30)
So the ending balance is $3,300
Accounts payable | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 3 | Computer supplies | 1,420 | 1,420 | ||
Oct 8 | Cash | 1,420 | 0 |
Table (31)
So the ending balance is $0
Common stock | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 1 | Cash | 73,000 | 73,000 |
Table (32)
So the ending balance is $73,000
Dividends | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 31 | Cash | 3,600 | 3,600 | ||
Nov 30 | Cash | 2,000 | 5,600 |
Table (33)
So the ending balance is $5,600
Service revenue | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 6 | Accounts receivable | 4,800 | 4,800 | ||
Oct 12 | Accounts receivable | 1,400 | 6,200 | ||
Oct 28 | Accounts receivable | 5,208 | 11,408 | ||
Nov 2 | Cash | 4,633 | 16,041 | ||
Nov 28 | Cash | 5,668 | 21,709 | ||
Nov 24 | Accounts receivable | 3,950 | 25,659 |
Table (34)
So the ending balance is $25,659
Wages expense | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 31 | Cash | 875 | 875 | ||
Nov 30 | Cash | 1,750 | 2,625 |
Table (35)
So the ending balance is $2,625
Advertising expense | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 20 | Cash | 1,728 | 1,728 |
Table (36)
So the ending balance is $1,728
Mileage expense | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Nov 1 | Cash | 320 | 320 | ||
Nov 28 | Cash | 384 | 704 |
Table (37)
So the ending balance is $704
Miscellaneous expense | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Nov 22 | Cash | 250 | 250 |
Table (38)
So the ending balance is $250
Repairs expense | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Oct 17 | Cash | 805 | 805 |
Table (39)
So the ending balance is $805
3.
To prepare:
3.
Explanation of Solution
BS | ||
Trial Balance | ||
November 30, 2017 | ||
Accounts Title | Amount($) | Amount($) |
Cash | 38,264 | |
Accounts Payable | 0 | |
Accounts Receivable | 12,618 | |
Equipment | 8,000 | |
Computer Equipment | 20,000 | |
Prepaid rent | 3,300 | |
Prepaid insurance | 2,220 | |
Misc. expense | 250 | |
Mileage expense | 704 | |
Capital | 73,000 | |
Dividends | 5,600 | |
Fees earned | 25,659 | |
Wages Expenses | 2,625 | |
Repair expenses | 805 | |
Advertising Expense | 1,728 | |
Supplies | 2,545 | |
Totals | 98,659 | 98,659 |
Table (40)
So, total trial balance is $98,659.
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Chapter 2 Solutions
FINANCIAL ACCOUNTING FUNDAMENTALS W/ CO
- On October 1, 2019, 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. 27.Paid miscellaneous expenses, 1,100. Oct. 29. Received cash from customers on account, 7,600. 30.Paid wages of employees, 4,800. 31.Withdrew cash for personal 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. 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, 2019. 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?arrow_forwardThe transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1.Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Musics checking account. 1.Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1.Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2.Received 1,000 cash from customers on account. 3.On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3.Paid 250 to creditors on account. 4.Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5.Purchased office equipment on account from Office Mart, 7,500. 8.Paid for a newspaper advertisement, 200. 11.Received 1,000 for serving as a disc jockey for a party. 13.Paid 700 to a local audio electronics store for rental of digital recording equipment. 14.Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16.Received 2,000 for serving as a disc jockey for a wedding reception. 18.Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22.Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23.Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27.Paid electric bill, 915. 28.Paid wages of 1,200 to receptionist and part-time assistant. 29.Paid miscellaneous expenses, 540. 30.Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31.Withdrew 1,250 cash from PS Music for personal use. PS Musics chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2019.arrow_forwardThe transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music: store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for SO hours per month for a monthly fee of 3,600. Any additional hours beyond SO will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 to creditors on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 11. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew l,250 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts receivable 1,000 14 Supplies 170 15 Prepaid insurance 17 Office Equipment 21 Accounts payable 250 23 Unearned Revenue 31 Peyton smith, Drawing 4,000 32 Fees Earned 500 41 Wages Expense 6,200 50 Office Rent Expense 400 51 Equipment Rent Expense 800 52 Utilities Expense 675 53 Supplies Expense 300 54 music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1.Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2.Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4.Prepare an unadjusted trial balance as of July 31, 2019.arrow_forward
- Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2019. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: Instructions 1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closingtrial balance as of April 30, 2019, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2019, and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a twocolumn journal starting on Page 5 of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a. Insurance expired during May is 275. b. Supplies on hand on May 31 are 715. c. Depreciation of office equipment for May is 330. d. Accrued receptionist salary on May 31 is 325. e. Rent expired during May is 1,600. f. Unearned fees on May 31 are 3,210. 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance.arrow_forwardDomingo Company started its business on January 1, 2019. The following transactions occurred during the month of May. Prepare the journal entries in the journal on Page 1. A. The owners invested $10,000 from their personal account to the business account. B. Paid rent $500 with check #101. C. Initiated a petty cash fund $500 with check #102. D. Received $1,000 cash for services rendered. E. Purchased office supplies for $158 with check #103. F. Purchased computer equipment $2,500, paid $1,350 with check #104, and will pay the remainder in 30 days. G. Received $800 cash for services rendered. H. Paid wages $600, check #105. I. Petty cash reimbursement: office supplies $256, maintenance expense $108, postage expense $77, miscellaneous expense $55. Cash on hand $11. Check #106. J. Increased petty cash by $30, check #107.arrow_forwardInner Resources Company started its business on April 1, 2019. The following transactions occurred during the month of April. Prepare the journal entries in the journal on Page 1. A. The owners invested $8,500 from their personal account to the business account. B. Paid rent $650 with check #101. C. Initiated a petty cash fund $550 check #102. D. Received $750 cash for services rendered. E. Purchased office supplies for $180 with check #103. F. Purchased computer equipment $8,500, paid $1,600 with check #104 and will pay the remainder in 30 days. G. Received $1,200 cash for services rendered. H. Paid wages $560, check #105. I. Petty cash reimbursement office supplies $200, Maintenance Expense $140, Miscellaneous Expense $65. Cash on Hand $93. Check #106. J. Increased Petty Cash by $100, check #107.arrow_forward
- Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.arrow_forwardLavender Company started its business on April 1, 2019. The following are the transactions that happened during the month of April. Prepare the journal entries in the journal on Page 1. A. The owners invested $7,500 from their personal account to the business account. B. Paid rent $600 with check #101. C. Initiated a petty cash fund $250 check #102. D. Received $350 cash for services rendered. E. Purchased office supplies for $125 with check #103. F. Purchased computer equipment $1,500, paid $500 with check #104, and will pay the remainder in 30 days. G. Received $750 cash for services rendered. H. Paid wages $375, check #105. I. Petty cash reimbursement Office Supplies $50, Maintenance Expense $80, Miscellaneous Expense $60. Cash on hand $8. Check #106. J. Increased Petty Cash by $70, check #107.arrow_forwardHajun Company started its business on May 1, 2019. The following transactions occurred during the month of May. Prepare the journal entries in the journal on Page 1. A. The owners invested $5,000 from their personal account to the business account. B. Paid rent $400 with check #101. C. Initiated a petty cash fund $200 check #102. D. Received $400 cash for services rendered E. Purchased office supplies for $90 with check #103. F. Purchased computer equipment $1,000, paid $350 with check #104 and will pay the remainder in 30 days. G. Received $500 cash for services rendered. H. Paid wages $250, check #105. I. Petty cash reimbursement office supplies $25, Maintenance Expense $125, Miscellaneous Expense $35. Cash on hand $18. Check #106. J. Increased Petty Cash by $50, check #107.arrow_forward
- You are the accountant for Kamal Fabricating, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the companys general ledger and other financial reports (all balances are end-of-year except for those noted otherwise: Prepare the companys Statement of Retained Earnings.arrow_forwardKelly Pitney began her consulting business, Kelly Consulting, on April 1, 2019. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, 4,500. 5. Received cash from clients on account, 2,450. 9. Paid cash for a newspaper advertisement, 225. 13. Paid Office Station Co. for part of the debt incurred on April 5, 640. 15. Provided services on account for the period May 115, 9,180. 16. Paid part-time receptionist for two weeks' salary including the amount owed on April 30, 750. 17. Received cash from cash clients for fees earned during the period May 116, 8,360. Record the following transactions on Page 6 of the journal: 20. Purchased supplies on account, 735. 21. Provided services on account for the period May 1620, 4,820. 25. Received cash from cash clients for fees earned for the period May 1723, 7,900. 27. Received cash from clients on account, 9,520. 28. Paid part-time receptionist for two weeks' salary, 750. 30. Paid telephone bill for May, 260. 31. Paid electricity bill for May, 810. 31. Received cash from cash clients for fees earned for the period May 2631, 3,300. 31. Provided services on account for the remainder of May, 2,650. 31. Kelly withdrew 10,500 for personal use. Instructions 1.The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2019, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2019, and place a check mark () in the Posting Reference column Journalize each of the May transactions in a two column Journal starting on Page 5 of the journal and using Kelly Consulting's chart of accounts. (Do not insert the account numbers in the journal at this time.) 2.Post the journal to a ledger of four-column accounts. 3Prepare an unadjusted trial balance. 4.At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a.Insurance expired during May is 275. b.Supplies on hand on May 3 1 are 715. c.Depreciation of office equipment for May is 330. d.Accrued receptionist salary on May 31 is 325. e.Rent expired during May is 1,600. f.Unearned fees on May 31 are 3,210. 5.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6.Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7.Prepare an adjusted trial balance. 8.Prepare an income statement, a statement of owner's equity, and a balance sheet. 9.Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 10.Prepare a post-closing trial balance.arrow_forwardYou are the accountant for Trumpet and Trombone Manufacturing, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the companys general ledger and other financial reports (all balances are end-of-year except for those noted otherwise): Prepare the companys Statement of Retained Earningsarrow_forward
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