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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Problem 2-60A Journalizing and Posting Transactions

Cincinnati Painting Service Inc. specializes in painting houses. During June, its first month of operations, Cincinnati Painting engaged in the following transactions:

June 1 Issued common stock for $25,000.

3 Purchased painting supplies from River City Supply for $1,675 on credit,

8 Purchased a used truck from Hamilton Used Car Sales for 513300. paying 31,500 down and agreeing to pay the balance in 6 months.

14 Paid $4230 to hourly employers for work performed in June.

22 Billed various customers a total of $10,340 for June painting jobs.

26 Received $6.100 cash from James Elton for a house painting job completed and previously billed.

29 Collected $52.0 from Albert Montgomery on completion of a 1-day painting job. This amount is not included in the June 22 bills.

Required:

1. Prepare a journal entry for each transaction.

2. Post the journal entries to the appropriate T-accounts.

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Requirement: 1

Journalize the each transaction.

Explanation
    Date AssetsLiabilitiesStockholders’ Equity
    June
    1Increase (Cash)Increase (Common Stock)
    3Increase (Supplies)Increase (Accounts Payable)
    8Increase (Trucks)Increase (Notes Payable)
    Decrease (Cash)
To determine

Introduction:

T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.

Requirement 2

Posting the journal entries into their concerned T-accounts.

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