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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
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BuyFindarrow_forward

College Accounting, Chapters 1-27

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

JOURNALIZING AND POSTING TRANSACTIONS Benito Mendez opened Mendez Appraisals. He rented office space and has a part-time secretary to answer the phone and make appraisal appointments. His chart of accounts is as follows:

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

May 1 Mendez invested cash in the business, $5,000.

2 Paid rent, $500.

3 Purchased office supplies, $100.

4 Purchased office equipment on account, $2,000.

5 Received cash for services rendered, $280.

8 Paid phone bill, $38.

9 Paid electric bill, $42.

10 Received cash for services rendered, $310.

13 Paid part-time employee, $500.

14 Paid car rental for out-of-town trip, $200.

15 Paid for newspaper ad, $30.

18 Received cash for services rendered, $620.

19 Paid mileage reimbursement for part-time employee’s use of personal car

for business deliveries (transportation expense), $22.

21 Mendez withdrew cash for personal use, $50.

23 Made payment on account for office equipment purchased earlier, $200.

May 24 Earned appraisal fee, which will be paid in a week, $500.

26 Paid for newspaper ad, $30.

27 Paid for local softball team sponsorship (miscellaneous expense), $15.

28 Paid part-time employee, $500.

29 Received cash on account, $250.

30 Received cash for services rendered, $280.

31 Paid cab fare (transportation expense), $13.

REQUIRED

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

2. Journalize the transactions for May in a two-column general journal. Use the following journal page numbers: May 1–10, page 1; May 13–24, page 2; May 26–31, 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 May, and a balance sheet as of May 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)

(Figure 7)

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 May and a balance sheet as of May 31, 20--.

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