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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

SERIES A PROBLEMS

JOURNALIZING AND POSTING TRANSACTIONS Annette Creighton opened Creighton Consulting. She rented a small office and paid a part-time worker to answer the phone and make deliveries. Her chart of accounts is as follows:

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Creighton’s transactions for the first month of business are as follows:

Jan. 1 Creighton invested cash in the business, $10,000.

1 Paid rent, $500.

2 Purchased office supplies on account, $300.

4 Purchased office equipment on account, $1,500.

6 Received cash for services rendered, $580.

7 Paid phone bill, $42.

8 Paid utilities bill, $38.

10 Received cash for services rendered, $360.

12 Made payment on account, $50.

13 Paid for car rental while visiting an out-of-town client (transportation expense), $150.

15 Paid part-time worker, $360.

17 Received cash for services rendered, $420.

18 Creighton withdrew cash for personal use, $100.

20 Paid for a newspaper ad, $26.

22 Reimbursed part-time employee for cab fare incurred delivering Materials to clients (transportation expense), $35.

24 Paid for books on consulting practices (miscellaneous expense), $28.

25 Received cash for services rendered, $320.

27 Made payment on account for office equipment purchased, $150.

29 Paid part-time worker, $360.

30 Received cash for services rendered, $180.

REQUIRED

1. Set up general ledger accounts from the chart of accounts.

2. Journalize the transactions for January in a two-column general journal. Use the following journal page numbers: January 1–10, page 1; January 12–24, page 2; January 25–30, page 3.

3. Post the transactions to the general ledger.

4. Prepare a trial balance.

5. Prepare an income statement and a statement of owner’s equity for the month of January and a balance sheet as of January 31, 20--.

1.

To determine

Set up general ledger accounts from the chart of accounts.

Explanation

General ledger:

General ledger is a record of all accounts of assets, liabilities, and stockholders’ equity, necessary to prepare financial statements.

Set up general ledger accounts from the chart of accounts.

(Figure 1)

(Figure 2)

(Figure 3)

(Figure 4)

(Figure 5)

(Figure 6)

2.

To determine

Prepare journal entry to record the given transactions.

3.

To determine

Post the transactions to the general ledger.

4.

To determine

Prepare a trial balance.

5.

To determine

Prepare an income statement and a statement of owner’s equity for the month of January and a balance sheet as of January 31, 20--.

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