On August 1, 2018, Rafael Masey established Planet Realty, which completed the f
ID: 2328550 • Letter: O
Question
On August 1, 2018, Rafael Masey established Planet Realty, which completed the following transactions during the month:
Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $17,500.
Purchased supplies on account, $2,300.
Earned sales commissions, receiving cash, $13,300.
Paid rent on office and equipment for the month, $3,000.
Paid creditor on account, $1,150.
Paid dividends, $1,800.
Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400.
Paid office salaries, $2,800.
Determined that the cost of supplies used was $1,050.
Instructions
Journalize entries for transactions (A) through (I), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Journal entry explanations may be omitted.
Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.
Prepare an unadjusted trial balance as of August 31, 2018.
Determine the following:
Amount of total revenue recorded in the ledger.
Amount of total expenses recorded in the ledger.
Amount of net income for August.
Check Figure: 4. C. $4,550
Determine the increase or decrease in retained earnings for August.
Explanation / Answer
Total revenue recorded in the ledger: $13300
Total expenses recorded in the ledger: $8750
Net income for August: $13300 - $8750 = $4550
Increase or decrease in retained earnings for August: Increase $2750
Net income $4550 - Dividends $1800 = Increase $2750
Transaction Account Titles and Explanation Debit Credit a. Cash 17500 Common stock 17500 (To record issuance of common stock) b. Supplies 2300 Accounts payable 2300 (To record supplies purchased on account) c. Cash 13300 Sales commissions 13300 (To record cash received for sales commissions earned) d. Rent expense 3000 Cash 3000 (To record rent paid) e. Accounts payable 1150 Cash 1150 (To record payment on account) f. Dividends 1800 Cash 1800 (To record dividends paid) g. Automobile expense 1500 Miscellaneous expense 400 Cash 1900 (To record expenses paid) h. Office salaries expense 2800 Cash 2800 (To record office salaries paid) i. Supplies expense 1050 Supplies 1050 (To record cost of supplies used)Related Questions
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