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Chapter 2: 19E_1 (page 95)

Question: The following transactions occurred for Wilke Technology Solutions:

May 1 The business received cash of \(105,000 and issued common stock to Zoe Wilke.

2 Purchased office supplies on account, \)550.

4 Paid \(57,000 cash for building and land. The building had a fair market value of \)45,000.

6 Performed services for customers and received cash, \(3,600.

9 Paid \)350 on accounts payable.

17 Performed services for customers on account, \(3,500.

19 Paid rent expense for the month, \)1,200.

20 Received \(1,500 from customers for services to be performed next month.

21 Paid \)900 for advertising in next month鈥檚 IT Technology magazine.

23 Received \(3,100 cash on account from a customer.

31 Incurred and paid salaries, \)1,700

Posting journal entries to four-column accounts

Requirements 1. Open four-column accounts using the following account numbers: Cash, 110; Accounts Receivable, 120; Office Supplies, 130; Prepaid Advertising, 140; Land, 150; Building, 160; Accounts Payable, 210; Unearned Revenue, 220; Common Stock, 310; Service Revenue, 410; Rent Expense, 510; and Salaries Expense, 520.

Short Answer

Expert verified

Accounts receivables are the amount owed to the business and required accounts are opened in step 2.

Step by step solution

01

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

Accounts receivables are defined as the balance sheet item which represents the amount owed to the business by the clients or customers

02

Opening of Accounts

Cash Account Number - 110

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Accounts Receivables Account Number - 120

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Office Supplies Account Number - 130

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Prepaid Advertising Account Number - 140

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Land Account Number - 150

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Building Account Number - 160

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Accounts Payable Account Number - 210

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Unearned Revenue Account Number - 220

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Common Stock Account Number - 310

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Service Revenue Account Number - 410

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Rent Expense Account Number - 510

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Salaries Expense Account Number - 520

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

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Most popular questions from this chapter

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鈥檚 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 3. Prepare the trial balance as of June 30, 2018

What is the purpose of the trial balance?

Question:The following transactions occurred for Lawrence Engineering:

Jul. 2 Received \(14,000 contribution from Brett Lawrence in exchange for common stock.

4 Paid utilities expense of \)370.

5 Purchased equipment on account, \(1,600.

10 Performed services for a client on account, \)2,900.

12 Borrowed \(7,100 cash, signing a notes payable.

19 Cash dividends of \)200 were paid to stockholders.

21 Purchased office supplies for $840 and paid cash.

27 Paid the liability from July 5.

Requirements 1. Open the following T-accounts for Lawrence Engineering: Cash; Accounts Receivable; Office Supplies; Equipment; Accounts Payable; Notes Payable; Common Stock; Dividends; Service Revenue; and Utilities Expense.

For each account, identify if the change would be recorded as a debit (DR) or credit (CR).

11. Increase to Cash 16. Increase to Interest Revenue

12. Decrease to Accounts Payable 17. Increase to Rent Expense

13. Increase to Common Stock 18. Decrease to Office Supplies

14. Increase to Unearned Revenue 19. Increase to Prepaid Rent

15. Decrease to Accounts Receivable 20. Increase to Notes Payable

Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners. Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of \(6,000. The business completed the following transactions during June:

a. McChesney deposited \)10,000 cash in a business bank account to start the company. The company issued common stock to McChesney.

b. Paid \(300 cash for office supplies.

c. Incurred advertising expense on account, \)700.

d. Paid the following cash expenses: administrative assistant鈥檚 salary, \(1,400; office rent, \)1,000.

e. Earned service revenue on account, \(8,800.

f. Collected cash from customers on account, \)1,200.

Requirements

3. Prepare a trial balance at June 30, 2018
See all solutions

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