On October 1, 2010, Cody Doerr established Banyan Realty, which completed the fo
ID: 2365850 • Letter: O
Question
On October 1, 2010, Cody Doerr established Banyan Realty, which completed the following transactions during the month:
a.Cody Doerr transferred cash from a personal bank account to an account to be used for the business, $17,500.
b.Purchased supplies on account, $1,000.
c.Earned sales commissions, receiving cash, $12,250.
d.Paid rent on office and equipment for the month, $3,800.
e.Paid creditor on account, $600.
f.Withdrew cash for personal use, $3,000.
g.Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400.
h.Paid office salaries, $3,100.
i.Determined that the cost of supplies used was $725.
Debit Credit
Common Stock/Cody Capital $17,500
Supplies Inventory(1000-725) $275
Supplies expense $725
Sales Commission $12,250
Rent $3,800
Dividend $3,000
Automobile expense $1,500
Misc. expense $400
Salaries expense $3,100
Accounts Payable $400
Cash 1 $17,350
$30,150 $30,150
1 Cash Account
Debit Credit
Common Stock $17,500
Sales Comm. $12,250
Accounts payable $600
Rent $3,800
Dividend $3,000
Automobile exp. $1,500
Misc. expense $400
Salaries exp. $3,100
Ending balance $17,350
$29,750 $29,750
1. Determine the following:
a. Amount of total revenues recorded in the ledger.
$
b. Amount of total expenses recorded in the ledger.
$
c. Amount of net income for October.
$
Explanation / Answer
1) Journalize entries for transactions (a) through (i)
a. Cody Doerr transferred cash from a personal bank account to an account to be used for the business in exchange for capital stock, $17,500
Cash $17,500
Cody Doerr, Capital $17,500
_____________________________________________
b. Purchased supplies on account, $1,000
Supplies $1,000
Accounts Payable $1,000
______________________________________________
c. Earned sales commission, receiving cash. $12,250
Cash $12,250
Sales Commissions $12,250
__________________________________________________
d. Paid rent on office and equipment for the month, $3,800
Rent expense $3,800
Cash $3,800
___________________________________________________
e. Paid creditor on account, $600
Accounts Payable $600
Cash $600
___________________________________________________
f. Withdrew cash for personal use, $3,000
Cody Doerr, Drawings $3,000
Cash $3,000
____________________________________________________
g. Paid automobile expenses ( including rental charge) for the month $1,500, and for miscellaneous expense, $400.
Automobile expense $1,500
Miscellaneous expense $400
Cash $1,900
_______________________________________________
h. Paid office salaries, $,3,100
Office Salaries expense $3,100
Cash $3,100
_______________________________________________
i. Determined that the cost of supply used was $725.
Supplies expense $725
Supplies $725
________________________________________________
2. In the attached spreadsheet, 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, for all accounts having two or more debits or credits. A memorandum balance should be inserted in accounts having both debits and credits, in the manner illustrated in the chapter. For accounts with entries on one side only, there is no need to insert a memorandum balance in the item column. For accounts containing only a single debit and a single credit, the memorandum balance should be inserted in the appropriate item column.
Cash Account
Debit Credit
Cody Doerr, Capital $17,500 (a)
Cody Doerr, Drawings $3,000 (f)
Sales Comm. $12,250 (c)
Rent $3,800 (d)
Accounts payable $600 (e)
Automobile exp. $1,500 (g)
Misc. expense $400 (g)
Salaries exp. $3,100 (h)
Memo balance $17,350
$29,750 $29,750
Cody Doerr, Capital
Debit Credit
Cash $17,500 (a)
Memo Balance $17,500
$17,500 $17,500
Cody Doerr, Drawings
Debit Credit
Cash $3,000 (f)
Memo Balance $3,000
$3,000 $3,000
Accounts Payable
Debit Credit
Supplies $1,000 (b)
Cash $600 (e)
Memo Balance $400
$1,000 $1,000
Supplies
Debit Credit
Accounts Payable $1,000 (b)
Supplies expense $725 (i)
Memo Balance $275
$1,000 $1,000
Sales Commission
Debit Credit
Cash $12,250 (c)
Memo Balance $12,250
$12,250 $12.250
Rent Expense
Debit Credit
Cash $3,800 (d)
Memo Balance $3,800
$3,800 $3,800
Automobile Expense
Debit Credit
Cash $1,500 (g)
Memo Balance $1,500
$1,500 $1,500
Miscellaneous Expense
Debit Credit
Cash $400 (g)
Memo Balance $400
$400 $400
Office Salaries Expense
Debit Credit
Cash $3,100 (h)
Memo Balance $3,100
$3,100 $3,100
Supplies Expense
Debit Credit
Supplies $725 (i)
Memo Balance $725
3) Prepare an unadjusted trial balance as of October 31, 2010
Debit Credit
Cody Doerr, Capital $17,500
Cody Doerr, Drawings $3,000
Supplies $275
Supplies expense $725
Sales Commission $12,250
Rent $3,800
Automobile expense $1,500
Misc. expense $400
Office Salaries expense $3,100
Accounts Payable $400
Cash $17,350
$30,150 $30,150
1. Determine the following:
a. Amount of total revenues recorded in the ledger.
$12,250
b. Amount of total expenses recorded in the ledger.
$9,525 (725+3800+1500+400+3100)
c. Amount of net income for October.
$2,725 ($12,250 - $9,525)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.