1.
Set up general ledger accounts by entering the balances as of November 1.
1.
Explanation of Solution
General ledger:
General ledger is a record of all accounts of assets, liabilities, and
(Figure 1)
(Figure 2)
(Figure 3)
(Figure 4)
(Figure 5)
(Figure 6)
(Figure 7)
(Figure 8)
(Figure 9)
(Figure 10)
(Figure 11)
(Figure 12)
(Figure 13)
(Figure 14)
2.
Prepare
2.
Explanation of Solution
Prepare journal entry to record the given transactions.
Date | Accounts title and explanation |
Post. Ref. |
Debit ($) |
Credit ($) |
November 1 | Rent Expense | 521 | 300 | |
Cash | 101 | 300 | ||
(To record the payment on November ) | ||||
November 2 | Tailoring supplies | 141 | 150 | |
Accounts payable | 202 | 150 | ||
(To record the purchase of tailoring supplies on account) | ||||
November 3 | Tailoring Equipment | 183 | 300 | |
Accounts payable | 202 | 300 | ||
(To record the purchase machine on account) | ||||
November 5 | Cash | 101 | 100 | |
| 122 | 300 | ||
Tailoring fees | 401 | 400 | ||
(To record the amount earned on tailoring fees) | ||||
November 8 | Advertising expense | 512 | 13 | |
Cash | 101 | 13 | ||
(To record the payment made on the newspaper ad) | ||||
November 9 | Phone Expense | 525 | 28 | |
Cash | 101 | 28 | ||
(To record the payment of phone bill) | ||||
November 10 | Electricity Expense | 533 | 21 | |
Cash | 101 | 21 | ||
(To record the payment of electricity bill) | ||||
November 11 | Cash | 101 | 200 | |
Accounts Receivable | 122 | 200 | ||
(To record the cash to be received on account) | ||||
November 12 | Cash | 101 | 200 | |
Accounts receivable | 122 | 250 | ||
Tailoring Fees | 401 | 450 | ||
(To record the cash on tailoring fees) | ||||
November 15 | Wages Expense | 511 | 400 | |
Cash | 101 | 400 | ||
(To record the payment made to the employee) | ||||
November 16 | Accounts Payable | 202 | 100 | |
Cash | 101 | 100 | ||
(To record the payment of cash on account) | ||||
November 17 | Miscellaneous Expense | 549 | 12 | |
Cash | 101 | 12 | ||
(To record the payment made for magazine subscription) | ||||
November 19 | Cash | 101 | 300 | |
Accounts receivable | 122 | 150 | ||
Tailoring Fees | 401 | 450 | ||
(To record the cash on tailoring fees) | ||||
November 23 | Cash | 101 | 300 | |
Accounts Receivable | 122 | 300 | ||
(To record the amount of cash received on account) | ||||
November 24 | Advertising expense | 512 | 13 | |
Cash | 101 | 13 | ||
(To record the payment made on the newspaper ad) | ||||
November 26 | Miscellaneous Expense | 549 | 12 | |
Cash | 101 | 12 | ||
(To record the payment made for magazine subscription) | ||||
November 27 | Cash | 101 | 200 | |
Accounts receivable | 122 | 400 | ||
Tailoring Fees | 401 | 600 | ||
(To record the cash on tailoring fees) | ||||
November 30 | Cash | 101 | 400 | |
Accounts Receivable | 122 | 400 | ||
(To record the cash received on account) |
(Table 1)
3.
3.
Explanation of Solution
Post the entries to the general ledger.
(Figure 18)
(Figure 19)
(Figure 20)
(Figure 21)
(Figure 22)
(Figure 23)
(Figure 24)
(Figure 25)
(Figure 26)
(Figure 27)
(Figure 28)
(Figure 29)
(Figure 30)
(Figure 31)
4.
Prepare a
4.
Explanation of Solution
Prepare a trial balance.
Company T | |||
Trial balance | |||
November 31, 20.. | |||
Accounts | Account No. | Debit ($) | Credit ($) |
Cash | 101 | 7,012 | |
Accounts Receivable | 122 | 684 | |
Tailoring Supplies | 141 | 1,150 | |
Tailoring Equipment | 183 | 4,100 | |
Accounts Payable | 202 | 4,475 | |
Person A’s, Capital | 311 | 6,130 | |
Person A’s, Drawing | 312 | 800 | |
Tailoring Fees | 401 | 5,500 | |
Wages Expense | 511 | 1,200 | |
Advertising Expense | 512 | 60 | |
Rent Expense | 521 | 900 | |
Phone Expense | 525 | 88 | |
Electricity Expense | 533 | 65 | |
Miscellaneous Expense | 549 | 46 | |
Total | 16,105 | 16,105 |
(Table 2)
Therefore, the total of the debit and credit column of the trial balance reported an amount of $16,105.
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Chapter 4 Solutions
COLLEGE ACCOUNTING
- In April, J. Rodriguez established an apartment rental service. The account headings are presented below. Transactions completed during the month of April follow. a. Rodriguez deposited 70,000 in a bank account in the name of the business. b. Paid the rent for the month, 2,000, Ck. No. 101 (Rent Expense). c. Bought supplies on account, 150. d. Bought a truck for 23,500, paying 2,500 in cash and placing the remainder on account. e. Bought insurance for the truck for the year, 2,400, Ck. No. 102. f. Sold services on account, 4,700. g. Bought office equipment on account from Stern Office Supply, 1,250. h. Sold services for cash for the first half of the month, 8,250. i. Received and paid the bill for utilities, 280, Ck. No. 103. j. Received a bill for gas and oil for the truck, 130. k. Paid wages to the employees, 2,680, Ck. Nos. 104106. l. Sold services for cash for the remainder of the month, 3,500. m. Rodriguez withdrew cash for personal use, 4,000, Ck. No. 107. 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_forwardJournal entries and trial balance On October 1, 20Y4, 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 in exchange for common stock, 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. Oct. 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. 29. Received cash from customers on account, 7,600. 30. Paid wages of employees, 4,800. 31. Paid dividends, 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. 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Equipment 18 Truck 21 Notes Payable 22 Accounts Payable 31 Common Stock 33 Dividends 41 Fees Earned 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Truck Expense 59 Miscellaneous Expense 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, 20Y4. 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_forwardEntries into T accounts and trial balance Marjorie Knaus, an architect, organized Knaus Architects on January 1, 20Y4. During the month, Knaus Architects completed the following transactions: a. Issued common stock to Marjorie Knaus in exchange for 30,000. b. Paid January rent for office and workroom, 2,500. c. Purchased used automobile for 28,500, paying 6,000 cash and giving a note payable for the remainder. d. Purchased office and computer equipment on account, 8,000. e. Paid cash for supplies, 2,100. f. Paid cash for annual insurance policies, 3,600. g. Received cash from client for plans delivered, 9,000. h. Paid cash for miscellaneous expenses, 2,600. i. Paid cash to creditors on account, 4,000. j. Paid installment due on note payable, 1,875. k. Received invoice for blueprint service, due in February, 5,500. l. Recorded fees earned on plans delivered, payment to be received in February, 31,400. m. Paid salary of assistants, 6,000. n. Paid gas, oil, and repairs on automobile for January, 1,300. Instructions 1. Record these transactions directly in the following T accounts, without journalizing: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes Payable, Accounts Payable, Common Stock, Professional Fees, Salary Expense, Blueprint Expense, Rent Expense, Automobile Expense, Miscellaneous Expense. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction. 2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance. 3. Prepare an unadjusted trial balance for Knaus Architects as of January 31, 20Y4. 4. Determine the net income or net loss for January.arrow_forward
- In April, J. Rodriguez established an apartment rental service. The account headings are presented below. Transactions completed during the month of April follow. a. Rodriguez deposited 70,000 in a bank account in the name of the business. b. Paid the rent for the month, 2,000, Ck. No. 101 (Rent Expense). c. Bought supplies on account, 150. d. Bought a truck for 23,500, paying 2,500 in cash and placing the remainder on account. e. Bought insurance for the truck for the year, 2,400, Ck. No. 102. f. Sold services on account, 4,700 (Service Income). g. Bought office equipment on account from Stern Office Supply, 1,250. h. Sold services for cash for the first half of the month, 8,250 (Service Income). i. Received and paid the bill for utilities, 280, Ck. No. 103 (Utilities Expense). j. Received a bill for gas and oil for the truck, 130 (Gas and Oil Expense). k. Paid wages to the employees, 2,680, Ck. Nos. 104106 (Wages Expense). l. Sold services for cash for the remainder of the month, 3,500 (Service Income). m. Rodriguez withdrew cash for personal use, 4,000, Ck. No. 107. Required 1. In the equation, write the owners name above the terms Capital and Drawing. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forwardOn May 1, B. Bangle opened Self-Wash Laundry. His accountant listed the following chart of accounts: The following transactions were completed during May: a. Bangle deposited 35,000 in a bank account in the name of the business. b. Bought chairs and tables, paying cash, 1,870, Ck. No. 1000. c. Bought supplies on account from Barnes Supply Company, 225. d. Paid the rent for the current month, 875, Ck. No. 1001. e. Bought washing machines and dryers from Lara Equipment Company, 12,500, paying 3,600 in cash and placing the balance on account, Ck. No. 1002. f. Sold services for cash for the first half of the month, 1,925. g. Bought insurance for one year, 1,560, Ck. No. 1003. h. Paid on account to Lara Equipment Company, 1,800, Ck. No. 1004. i. Received and paid electric bill, 285, Ck. No. 1005. j. Sold services for cash for the second half of the month, 1,835. k. Paid wages to an employee, 940, Ck. No. 1006. l. Bangle withdrew cash for his personal use, 800, Ck. No. 1007. m. Paid on account to Barnes Supply Company, 225, Ck. No. 1008. n. Received and paid bill from the county for sidewalk repair assessment, 280, Ck. No. 1009. Required 1. Record the owners name in the Capital and Drawing T accounts. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts. 3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction. 4. Foot the T accounts and show the balances. 5. Prepare a trial balance as of May 31, 20--. 6. Prepare an income statement for May 31, 20--. 7. Prepare a statement of owners equity for May 31, 20--. 8. Prepare a balance sheet as of May 31, 20--.arrow_forwardCustomer Deposits Wolfe $ Wolfe collected $9,000 from a customer on April 1 and agreed to provide legal services during the next three months. Wolfe $ Wolfe expects to provide an equal amount of services each month. Required Prepare the journal entry for the receipt of the customer deposit on April 1. Prepare the adjusting entry on April 30. What will be the effect on net income for April if the entry in (2) is not recorded?arrow_forward
- Accounts Payable Sleek Ride, a company providing limo services, has a December 31 year-end date. For Sleek Ride, the following transactions occurred during the first 10 days of June: a. Purchased, on credit, space for classified advertisements in the New York Times for $1,950. The advertising was run the day the space was purchased. b. Purchased office supplies from Office Max on credit in the amount of $475. c. One of Sleek Rides sales staff signed a $20,000 contract to provide exclusive limo services for a large company for the remainder of the month. The salespersons commission is 10% of service revenue. The commission will be paid July 10. ( Note: Concern yourself only with the commission.) d. Received electric bill for May. The bill is $4,200 and is due June 15. e. Received a bill for $970 from Harrys Auto. Harrys repaired 10 limos for Sleek Ride in late May. Payment is due June 18. Required: Prepare journal entries for the above transactions.arrow_forwardOffice Supplies Somerville Corp. purchases office supplies once a month and prepares monthly financial statements. The asset account Office Supplies on Hand has a balance of $1,450 on May 1. Purchases of supplies during May amount to $1,100. Supplies on hand at May 31 amount to $920. Prepare the necessary adjusting entry on Somervilles books on May 31. What will be the effect on net income for May if this entry is not recorded?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
- In 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 (Rent Expense). e. Sold services for cash for the first half of the month, 6,927 (Service Income). 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 (Utilities Expense). i. Received a bill for gas and oil for the truck, 218 (Gas and Oil Expense). j. Sold services on account, 3,603 (Service Income). k. Sold services for cash for the remainder of the month, 4,612 (Service Income). l. Paid wages to the employees, 3,958, Ck. Nos. 30053007 (Wages Expense). m. Carter withdrew cash for personal use, 1,250, Ck. No. 3008. Required 1. In the equation, write the owners name above the terms Capital and Drawing. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forwardJournal entries and trial balance On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month: a. Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, 40,000. b. Paid rent on office and equipment for the month, 4,800. c. Purchased supplies on account, 2,150. d. Paid creditor on account, 1,100. e. Earned sales commissions, receiving cash, 18,750. f. Paid automobile expenses (including rental charge) for month, 1,580, and miscellaneous expenses, 800. g. Paid office salaries, 3,500. h. Determined that the cost of supplies used was 1,300. i. Paid dividends, 1,500. 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. 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 October 31, 20Y6. 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 October. 5. Determine the increase or decrease in retained earnings for October.arrow_forwardJournal 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.arrow_forward
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