Marjorie Knaus, an architect, organized Knaus Architects on January 1, 2018. Dur

Question

Marjorie Knaus, an architect, organized Knaus Architects on January 1, 2018. During the month, Knaus Architects completed the following transactions: A. Issued common stock to Marjorie Knaus in exchange for $20,500. B. Paid January rent for office and workroom, $1,500. C. Purchased used automobile for $25,300, paying $5,800 cash and giving a note payable for the remainder. D. Purchased office and computer equipment on account, $5,800. E. Paid cash for supplies, $1,250. F. Paid cash for annual insurance policies, $3,600 G. Received cash from client for plans delivered, $13,500. H. Paid cash for miscellaneous expenses, $2,100. I. Paid cash to creditors on account, $3,900. J. Paid installment due on note payable, $850. K. Received invoice for blueprint service, due in February, $5,000. L. Recorded fees earned on plans delivered, payment to be received in February, $20,70o. M. Paid salary of assistants, $3,800. N. Paid gas, oil, and repairs on automobile for January, $1,500. Required: 1. Record these transactions directly in the following T accounts, without journalizing:Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Common Stock; Professional Fees; Salary Expense; Blueprint Expense; Rent Expense; Automobile Expense; Miscellaneous Expense. To the left of the amount entered in the accounts, select the approoriate letter to identify the transaction

Explanation / Answer

Solution:

1&2) Preparing the T-Accounts and Determining the Balances of T-Accounts:

3) Preparing an Unadjusted Trial Balance for Knaus Architechs as of January 31, 2018:

Knaus Architects

UNADJUSTED TRIAL BALANCE

January 31, 2018

2

Accounts Receivable

3

Supplies

4

Prepaid Insurance

5

Automobiles

6

Equipment

7

Notes Payable

8

Accounts Payable

9

Common Stock

10

Professional Fees

11

Salary Expense

12

Blueprint Expense

13

Rent Expense

14

Automobile Expense

15

Miscellaneous Expense

Totals

4) Determining the Net Income (or) Net Loss for January:

Net income: $18,500 ($32,400 - $3,800 - $5,000 - $1,500 - $1,500 - $2,100)

Cash A. $20,500 B. $1,500 G. $13,500 C. $5,800 E. $1,250 F. $3,600 H. $2,100 I. $3,900 J. $850 M. $3,800 N. $1,500 Bal. $9,700

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