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Horngren'S Financial And Managerial Accounting
Found in: Page 97

Short Answer

Question: Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance The following transactions occurred during the month for Teresa Parker, CPA:

Jun. 1 Parker opened an accounting firm by contributing $13,200 cash and office furniture with a fair market value of $5,300 in exchange for common stock.

5 Paid monthly rent of $1,300.

9 Purchased office supplies on account, $600.

14 Paid employee’s salary, $1,900.

18 Received a bill for utilities to be paid next month, $370.

21 Paid $500 of the accounts payable created on June 9.

25 Performed accounting services on account, $5,700.

28 Paid cash dividends of $6,700

Requirements 2. Journalize the transactions, and then post the journal entries to the four-column accounts. Explanations are not required for the journal entries. Keep a running balance in each account. Assume the journal entries are recorded on page 10 of the journal.

The required journal entries are passed in step 1 and four-column accounts is also prepared in step 2.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1:Journal Entries

Journal entry

Date

Particulars

Debit ($)

Credit ($)

June

1

Cash

$13,200

Office Furniture

$5,300

Common Stock

$18,500

5

Rent Expense

$1,300

Cash

$1,300

9

Office Supplies

$600

Accounts Payable

$600

14

Salary Expense

$1,900

Cash

$1,900

18

Utilities Expense

$370

Utilities Payable

$370

21

Accounts Payable

$600

Cash

$600

25

Accounts Receivables

$5,700

Service Revenue

$5,700

28

Dividends

$6,700

Cash

$6,700

Step 2: Opening of Accounts

Cash Account Number - 110

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Jun 1

Common stock

$13,200

$13,200

5

Rent Expense

$1,300

$11,900

14

Salary Expense

$1,900

$10,000

21

Accounts Payable

$500

$9,500

28

Dividends

$6,700

$2,800

Accounts Receivables Account Number - 120

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 25

Service Revenue

$5,700

$5,700

Office Supplies Account Number - 130

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 9

Accounts Payable

$600

$600

Office Furniture Account Number - 140

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Jun 1

Common stock

$5,300

$5,300

Accounts Payable Account Number - 210

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 9

Office Supplies

$600

$600

June 21

Cash

$500

$100

Utilities Payable Account Number - 220

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 18

Utility Expense

$370

$370

Common Stock Account Number - 310

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Jun 1

Cash

$13,200

$13,200

Furniture

$5,300

$5,300

Dividends Account Number - 320

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 28

Cash

$6,700

$6,700

Service Revenue Account Number - 410

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 25

Accounts Receivables

$5,700

$5,700

Salaries Expense Account Number - 510

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 14

Cash

$1,900

$1,900

Rent Expense Account Number – 520

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 5

Cash

$1,300

$1,300

Utilities Expense Account Number - 530

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

June 18

Utilities Payable

$370

$370

Most popular questions for Business-studies Textbooks

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions:

Cash 11,000

Office Supplies 400

Accounts Receivable 16,500

Land 30,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 52,300

Dividends 0

Rent Expense 800

Salaries Expense 5,600

Service Revenue 8,200

Total Balance $ 64,300 64,300

During April, the business completed the following transactions:

Apr. 4 Collected $2,500 cash from a client on account.

8 Performed tax services for a client on account, $5,400.

13 Paid $3,000 on account.

14 Purchased furniture on account, $3,600.

15 Merry contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of $9,500.

18 Purchased office supplies on account, $900.

19 Received $2,700 for tax services performed on April 8.

20 Paid cash dividends of $6,500.

21 Received $5,700 cash for consulting work completed.

24 Received $2,400 cash for accounting services to be completed next month.

27 Paid office rent, $600.

28 Paid employee salary, $1,700.

Requirements

2. Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11; Accounts Receivable, 12; Office Supplies, 13; Land, 14; Furniture, 15; Automobile, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52

Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance

Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions:

Nov. 1 Received $41,000 cash and issued common stock to Stewart.

4 Purchased office supplies, $1,200, and furniture, $2,300, on account.

6 Performed services for a law firm and received $2,100 cash.

7 Paid $27,000 cash to acquire land to be used in operations.

10 Performed services for a hotel and received its promise to pay the $800 within one week.

14 Paid for the furniture purchased on November 4 on account.

15 Paid assistant’s semimonthly salary, $1,470.

17 Received cash on account, $500.

20 Prepared a design for a school on account, $680.

25 Received $1,900 cash for design services to be performed in December.

28 Received $3,100 cash for consulting with Plummer & Gordon.

29 Paid $840 cash for a 12-month insurance policy starting on December 1.

30 Paid assistant’s semimonthly salary, $1,470. 30 Paid monthly rent expense, $650.

30 Received a bill for utilities, $650. The bill will be paid next month.

30 Paid cash dividends of $2,800.

Requirements 1. Record each transaction in the journal using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Furniture; Accounts Payable; Utilities Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.

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