Financial Accounting
Financial Accounting
5th Edition
ISBN: 9781259914898
Author: SPICELAND
Publisher: MCG
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Chapter 2, Problem 7PB

1.

To determine

Prepare the journal entry to record the transaction of S Car Cleaning for the month of June.

1.

Expert Solution
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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.

Accounting rules for Journal entries:

  • To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
  • To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

Journalize the transactions of S Car Cleaning for the month of June.

DateAccount Title and ExplanationDebit($)Credit($)
June 1Cash70,000 
Notes Payable 70,000
 (To record obtain of loan from the bank.)  
    
June 2Cash40,000 
Common Stock 40,000
 (To record common stock purchased for cash.)  
    
June 7Equipment75,000 
 Cash 75,000
 (To record purchase of equipment.)  
    
June 10Supplies8,000 
Accounts Payable 8,000
 (To record purchase of supplies on account)  
    
June 12Cash5,000 
Service revenue 5,000
 (To record the payment received for the altered dresses.)  
    
June 16Salary Expense900 
Cash 900
 (To record the salary payment made.)  
    
June 19Advertising Expense500 
Cash 500
 (To record the advertising payment made)  
    
June 23Accounts receivable6,000 
Service Revenue 6,000
  (To record receipt of payment for car washes were due ion account.)  
    
June 29Salaries Expense950 
Cash 950
 (To record salary expense payment)  
    
June 30Utilities Expense1,400 
Cash 1,400
 (To record utility expense payment.)  
    
June 30Dividends600 
Cash 600
 (To record the payment of Dividends made to the stockholders.)  

Table (1)

2. and 3.

To determine

Calculate the balance of each account by posting each transaction to the T-accounts.

2. and 3.

Expert Solution
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Explanation of Solution

T-account:

An account is referred to as a T-account, because the alignment of the components of the account resembles the capital letter ‘T’. An account consists of the three main components which are as follows:

  • The title of the account
  • The left or debit side
  • The right or credit side

Post the journal entries into T-accounts and determine the balance of each account.

Cash Account

Cash
DateDetailsDebit ($) DateDetailsCredit ($)
June 1Notes payable70,000 June 7Equipment75,000
June 2Common stock40,000 June 16Salaries expense900
June 12Service Revenue5,000 June 19Advertising expense500
    June 29Salaries expense950
  June 30Utilities expense1,400
    June 30Dividends600
    June 30Balance c/d35,650
  115,000115,000
July 1Balance b/d35,650

Table (2)

Common Stock Account

Common Stock
DateDetailsDebit ($) DateDetailsCredit ($)
June 30Balance c/d40,000 June 2Cash40,000
 Total40,000 Total40,000
    July 1Balance b/d40,000

Table (3)

Accounts Receivable Account

Accounts Receivable
DateDetailsDebit ($) DateDetailsCredit ($)
June 23Service Revenue6,000 June 30Balance c/d6,000
 Total6,000  Total6,000
July 1Balance b/d6,000    

Table (4)

Equipment Account

Equipment
DateDetailsDebit ($) DateDetailsCredit ($)
June 7Cash75,000 March 31Balance c/d75,000
 Total75,000  Total75,000
July 1Balance b/d75,000    

Table (5)

Supplies Account

Supplies
DateDetailsDebit ($) DateDetailsCredit ($)
June 10Accounts payable8,000 June 30Balance c/d8,000
 Total8,000 Total8,000
July 1Balance b/d8,000   

Table (6)

Accounts Payable Account

Accounts Payable
DateDetailsDebit ($) DateDetailsCredit ($)
June 30Balance c/d8,000 June 10Supplies8,000
 Total8,000  Total8,000
    July 1Balance b/d8,000

Table (7)

Service Revenue Account

Service Revenue
DateDetailsDebit ($) DateDetailsCredit ($)
June 30Balance c/d11,000 June 12Cash5,000
    June 23Accounts Receivable6,000
 Total11,000  Total11,000
    July 1Balance b/d11,000

Table (8)

Notes Payable Account

Notes Payable
DateDetailsDebit ($) DateDetailsCredit ($)
June 30Balance c/d2,700 June 7Equipment2,700
 Total2,700  Total2,700
    July 1Balance b/d2,700

Table (9)

Salary Expense Account

Salary Expense
DateDetailsDebit ($) DateDetailsCredit ($)
June 16Cash900 June 30Balance c/d1,850
June 29Cash950    
 Total1,850  Total1,850
July 1Balance b/d1,850    

Table (10)

Advertising Expense Account

Advertising Expense
DateDetailsDebit ($) DateDetailsCredit ($)
June 19Cash500 June 30Balance c/d500
 Total500  Total500
 Balance b/d500    

Table (11)

Utility Expense Account

Utility Expense
DateDetailsDebit ($) DateDetailsCredit ($)
June 30Cash1,400 June 30Balance c/d1,400
 Total1,400  Total1,400
July 1Balance b/d1,400    

Table (12)

Dividends Account

Dividends
DateDetailsDebit ($) DateDetailsCredit ($)
June 30Cash600 June 30Balance c/d600
 Total600  Total600
July 1Balance b/d600    

Table (13)

4.

To determine

Prepare a trial balance as of June.

4.

Expert Solution
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Explanation of Solution

Trial balance:

A trial balance is the summary of all the ledger accounts. Debit balances are listed in left column and credit balances are listed in right column of the trial balance. The totals of debit and credit column should be equal. The trial balance is usually prepared to check the accuracy of ledger accounts balances, before the preparation of financial statements.

Prepare the trial balance of S Car Cleaning for the month of June.

S Car Cleaning

Trial Balance

June 30

Account TitlesDebit ($)Credit ($)
Cash33,650 
Accounts receivable6,000 
Supplies8,000 
Equipment75,000 
Accounts payable 8,000
Notes payable 70,000
Common stock 40,000
Dividends600 
Service revenue 11,000
Salaries expense1,850 
Advertising expense500 
Utilities expense1,400 
Total129,000129,000

Table (14)

Conclusion

Hence, the trial balance is prepared, and the debit column and credit column of the trial balance are agreed, both having balance of $129,000.

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Chapter 2 Solutions

Financial Accounting

Ch. 2 - Prob. 11SSQCh. 2 - 12. The payment for utilities of the current month...Ch. 2 - Prob. 13SSQCh. 2 - Prob. 14SSQCh. 2 - 15. A trial balance can best be explained as a...Ch. 2 - Applying Excel #2-1 A company has the following...Ch. 2 - Applying Excel #2-2 A company has the following...Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - 6. What is the normal balance (debit or credit) of...Ch. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - Prob. 10RQCh. 2 - Prob. 11RQCh. 2 - 12. Provide the proper format for recording a...Ch. 2 - Prob. 13RQCh. 2 - Prob. 14RQCh. 2 - Prob. 15RQCh. 2 - Prob. 16RQCh. 2 - Prob. 17RQCh. 2 - Prob. 18RQCh. 2 - Prob. 19RQCh. 2 - Prob. 20RQCh. 2 - BE2-1 Below are the steps in the measurement...Ch. 2 - BE2-2 Using the notion that the accounting...Ch. 2 - BE2-3 Suppose a local company has the following...Ch. 2 - Prob. 4BECh. 2 - Prob. 5BECh. 2 - Prob. 6BECh. 2 - BE2-7 The following transactions occur for the...Ch. 2 - Prob. 8BECh. 2 - BE2-9 Consider the following T-account for...Ch. 2 - BE2-10 The following transactions occur for the...Ch. 2 - BE2-11 Using the following information, prepare a...Ch. 2 - BE2-12 Your study partner is having trouble...Ch. 2 - Prob. 1ECh. 2 - E2-2 Below are the external transactions for...Ch. 2 - Prob. 3ECh. 2 - E2-4 Boilermaker House Painting Company incurs the...Ch. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - E2-8 Terrapin Company engages in the following...Ch. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - E2-11 Bearcat Construction begins operations in...Ch. 2 - E2-12 Below are several transactions for Scarlet...Ch. 2 - Prob. 13ECh. 2 - Prob. 14ECh. 2 - E2-15 Consider the recorded transactions...Ch. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - E2-18 Below is the complete list of accounts of...Ch. 2 - Prob. 19ECh. 2 - Prob. 20ECh. 2 - Prob. 1PACh. 2 - Prob. 2PACh. 2 - Prob. 3PACh. 2 - Prob. 4PACh. 2 - Prob. 5PACh. 2 - Prob. 6PACh. 2 - Prob. 7PACh. 2 - Prob. 8PACh. 2 - Prob. 9PACh. 2 - P2-1B Below is a list of activities for Tigers...Ch. 2 - Prob. 2PBCh. 2 - Prob. 3PBCh. 2 - P2-4B Eli owns an insurance office, while Olivia...Ch. 2 - Prob. 5PBCh. 2 - Prob. 6PBCh. 2 - Prob. 7PBCh. 2 - Prob. 8PBCh. 2 - 4. prepare a trial balance as of November...Ch. 2 - Prob. 1APCh. 2 - Prob. 2APCh. 2 - Prob. 3APCh. 2 - American Eagle Outfitters, Inc. vs. The Buckle,...Ch. 2 - Prob. 5APCh. 2 - Prob. 6APCh. 2 - Prob. 7AP
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