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Financial & Managerial Accounting
Found in: Page 91
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Nuncio Consulting completed the following transactions during June.

a. Armand Nuncio, the owner, invested $35,000 cash along with office equipment valued at $11,000 in the new company in exchange for common stock.

b. The company purchased land valued at $7,500 and a building valued at $40,000. The purchase is paid with $15,000 cash and a long-term note payable for $32,500.

c. The company purchased $500 of office supplies on credit.

d. Nuncio invested his personal automobile in the company in exchange for more common stock. The automobile has a value of $8,000 and is to be used exclusively in the business.

e. The company purchased $1,200 of additional office equipment on credit.

f. The company paid $1,000 cash salary to an assistant.

g. The company provided services to a client and collected $3,200 cash.

h. The company paid $540 cash for this month’s utilities.

i. The company paid $500 cash to settle the payable created in transaction c.

j. The company purchased $3,400 of new office equipment by paying $3,400 cash.

k. The company completed $4,200 of services for a client, who must pay within 30 days.

l. The company paid $1,000 cash salary to an assistant.

m. The company received $2,200 cash in partial payment on the receivable created in transaction k.

n. The company paid $1,100 cash in dividends.

Required

2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (108); Office Equipment (163); Automobiles (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); Common Stock (307); Dividends (319); Fees Earned (402); Salaries Expense (601); and Utilities Expense (602). Post the journal entries from part 1 to the ledger accounts and enter the balance after each posting.

The total cash ledger balance amounts to $17,860.

See the step by step solution

Step by Step Solution

General Ledger (part 1)

Cash Account No. 101

Date

PR

Debit

Credit

Balance

a.

G1

$ 35,000

$ 35,000

b.

G1

$ 15,000

20,000

f.

G1

1,000

19,000

g.

G1

3,200

22,200

h.

G2

540

21,660

i.

G2

500

21,160

j.

G2

3,400

17,760

l.

G2

1,000

16,760

m.

G2

2,200

18,960

n.

G2

1,100

17,860

Accounts Receivables Account No. 106

Date

PR

Debit

Credit

Balance

k.

G2

$ 4,200

$ 4,200

m.

G2

2,200

2,000

Office Supplies Account No. 108

Date

PR

Debit

Credit

Balance

c.

G1

$ 500

$ 500

Office Equipment Account No. 163

Date

PR

Debit

Credit

Balance

a.

G1

$ 11,000

$ 11,000

e.

G1

1,200

12,200

j.

G2

3,400

15,600

Automobiles Account No. 164

Date

PR

Debit

Credit

Balance

d.

G1

$ 8,000

$ 8,000

General Ledger (part 2)

Building Account No. 170

Date

PR

Debit

Credit

Balance

b.

G1

$ 40,000

$ 40,000

Land Account No. 172

Date

PR

Debit

Credit

Balance

b.

G1

$ 7,500

$ 7,500

Accounts Payable Account No. 201

Date

PR

Debit

Credit

Balance

c.

G1

$ 500

$ 500

e.

G1

1,200

1,700

i.

G2

500

1,200

Notes Payable Account No. 250

Date

PR

Debit

Credit

Balance

B

G1

$ 32,500

$ 32,500

Common Stock Account No. 307

Date

PR

Debit

Credit

Balance

a.

G1

$ 46,000

$ 46,000

d.

G1

8,000

54,000

Dividends Account No. 319

Date

PR

Debit

Credit

Balance

n.

G2

$ 1,100

$ 1,100

General Ledger (part 3)

Fees Earned Account No. 402

Date

PR

Debit

Credit

Balance

g

G1

3,200

3,200

k.

G2

4,200

7,400

Salaries Expenses Account No. 601

Date

PR

Debit

Credit

Balance

f.

G1

$ 1,000

$ 1,000

l.

G2

1,000

2,000

Utilities Expense Account No. 602

Date

PR

Debit

Credit

Balance

h.

G2

$ 540

$ 540

Most popular questions for Business-studies Textbooks

Question: Aracel Engineering completed the following transactions in the month of June.

a. Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company in exchange for common stock.

b. The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a longterm note payable for $42,700.

c. The company purchased a portable building with $55,000 cash and moved it onto the land acquired in b.

d. The company paid $3,000 cash for the premium on an 18-month insurance policy.

e. The company completed and delivered a set of plans for a client and collected $6,200 cash.

f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.

g. The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.

h. The company purchased $1,150 of additional office equipment on credit.

i. The company completed engineering services for $22,000 on credit.

j. The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days.

k. The company collected $7,000 cash in partial payment from the client described in transaction g.

l. The company paid $1,200 cash for wages to a drafting assistant.

m. The company paid $1,150 cash to settle the account payable created in transaction h.

n. The company paid $925 cash for minor maintenance of its drafting equipment.

o. The company paid $9,480 cash in dividends.

p. The company paid $1,200 cash for wages to a drafting assistant.

q. The company paid $2,500 cash for advertisements on the web during June.

Required

1. Prepare general journal entries to record these transactions (use the account titles listed in part 2).

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