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Chapter 2: Q 36PGB-4 (page 108)

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鈥檚 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鈥檚 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.b

Requirements 4. Prepare the trial balance of Beth Stewart, Designer, as of November 30, 2018.

Short Answer

Expert verified

Common stock are the ownership stocks of the business and the required trial balance is prepared in step 2.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of Common Stock

The Common stocks are defined as the financial instrument which represents the ownership of the company

02

Preparation of Trial Balance

Beth Stewart
Trial Balance
November 30, 2018

Accounts Title

Debit ($)

Credit ($)

Cash

$12,070

Accounts Receivables

$980

Office Supplies

$1,200

Prepaid Insurance

$840

Land

$27,000

Furniture

$2,300

Accounts Payable

$1,200

Utilities Payable

$650

Unearned Revenue

$1,900

Common Stock

$41,000

Dividends

$2,800

Service Revenue

$6,680

Salaries Expense

$2,940

Rent Expense

$650

Utilities Expense

$650

Total

$51,430

$51,430

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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

Question:Preparing a trial balance from T-accounts

The T-accounts of McMahon Farm Equipment Repair follow as of May 31, 2018.

ASSETS Salaries Payable LIABILITIES EQUITY Retained Earnings 4,000 29,000 Notes Payable 3,500 400 Accounts Receivable 14,000 Land 29,000 Building 16,000 Equipment Common Stock Contributed Capital Dividends Property Tax Expense 1,000 Advertising Expense 280

Cash 31,000 1,800 400 14,000 4,200 800 4,000 2,000 3,380

Service Revenue 3,500 1,800 4,200 31,000 2

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 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 17,000

Office Supplies 1,200

Accounts Receivable 10,500

Land 29,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 46,200

Dividends 0

Rent Expense 1,000

Salaries Expense 2,500

Service Revenue 11,200

Total Balance \( 61,200 61,200

During April, the business completed the following transactions:

Apr. 4 Collected \)6,000 cash from a client on account.

8 Performed tax services for a client on account, \(5,500.

13 Paid \)3,300 on account.

14 Purchased furniture on account, \(4,000.

15 Menning contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of \)11,500.

18 Purchased office supplies on account, \(1,600.

19 Received \)2,750 for tax services performed on April 8.

20 Paid cash dividends of \(7,500.

21 Received \)4,900 cash for consulting work completed.

24 Received \(2,500 cash for accounting services to be completed next month.

27 Paid office rent, \)900.

28 Paid employee salary, $1,200.

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.

Question:Preparing financial statements from the trial balance and calculating the debt ratio

Preparing financial statements from the trial balance and calculating the debt ratio

Account Title Debit Credit

Office Supplies 1,400

Cash 32,000

Accounts Receivable 9,100

Prepaid Insurance 2,600

Equipment 24,000

Accounts Payable 3,400

Unearned Revenue 1,296

Notes Payable 34,000

Common Stock 20,000

Dividends 3,000

Salaries Expense 1,600

Rent Expense 700

Utilities Expense 100

Service Revenue 15,804

Total Balance \( 74,500 \) 74,500

Requirements 4. Calculate the debt ratio as of July 31, 2018.
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