Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q 30PGA-1

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 102

Short Answer

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

Ann Simpson started her practice as a design consultant on September 1, 2018. During the first month of operations, the business completed the following transactions:

Sep. 1 Received $48,000 cash and issued common stock to Simpson.

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

6 Performed services for a law firm and received $1,900 cash.

7 Paid $18,000 cash to acquire land to be used in operations.

10 Performed services for a hotel and received its promise to pay the $1,200 within one week.

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

15 Paid assistant’s semimonthly salary, $1,500.

17 Received cash on account, $1,000.

20 Prepared a design for a school on account, $650.

25 Received $2,100 cash for design services to be performed in October.

28 Received $2,900 cash for consulting with Plummer & Gordon.

29 Paid $600 cash for a 12-month insurance policy starting on October 1.

30 Paid assistant’s semimonthly salary, $1,500.

30 Paid monthly rent expense, $600.

30 Received a bill for utilities, $350. The bill will be paid next month.

30 Paid cash dividends of $3,700.

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.

The accounts payable is the amount owed to suppliers and required journal entries are passed in step 2.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Definition of Accounts Payable

The accounts payable are defined as the amount of money owed by the business to the supplier of goods or services.

Step 2: Recording Journal Entries

Journal entry

Date

Particulars

Debit ($)

Credit ($)

Sep

1

Cash

$48,000

Common Stock

$48,000

4

Office Supplies

$1,200

Furniture

$1,300

Accounts Payable

$2,500

6

Cash

$1,900

Service Revenue

$1,900

7

Land

$18,000

Cash

$18,000

10

Accounts Receivables

$1,200

Service Revenue

$1,200

14

Accounts Payable

$1,300

Cash

$1,300

15

Salary Expense

$1,500

Cash

$1,500

17

Cash

$1,000

Accounts Receivables

$1,000

20

Accounts Receivables

$650

Service Revenue

$650

25

Cash

$2,100

Unearned Revenue

$2,100

28

Cash

$2,900

Service Revenue

$2,900

29

Prepaid Insurance

$600

Cash

$600

30

Salary Expense

$1,500

Cash

$1,500

30

Rent expense

$600

Cash

$600

30

Utilities Expense

$350

Utilities Payable

$350

30

Dividends

$3,700

Cash

$3,700

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.