On November 1, 2016, Patty Cosgrove established an interior decorating business,

Question

On November 1, 2016, Patty Cosgrove established an interior decorating business, Classic Designs. During the month, Patty completed the following transactions related to the business: Nov. 1 Patty transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $26,000. 1 Paid rent for period of November 1 to end of month, $3,800. 6 Purchased office equipment on account, $12,710. 8 Purchased a truck for $30,400 paying $6,100 cash and giving a note payable for the remainder. 10 Purchased supplies for cash, $1,920. 12 Received cash for job completed, $8,300. 15 Paid annual premiums on property and casualty insurance, $2,200. 23 Recorded jobs completed on account and sent invoices to customers, $12,220. 24 Received an invoice for truck expenses, to be paid in November, $1,010. Enter the following transactions on Page 2 of the two-column journal: Nov. 29 Paid utilities expense, $3,510. 29 Paid miscellaneous expenses, $1,650. 30 Received cash from customers on account, $7,300. 30 Paid wages of employees, $4,550. 30 Paid creditor a portion of the amount owed for equipment purchased on November 6, $6,200. 30 Paid dividends, $2,400.

Explanation / Answer

Journal Debit Credit cash          26,000 Common Stock          26,000 Rent            3,800 cash            3,800 Office equipment          12,710 accounts payable          12,710 Truck          30,400 cash            6,100 notes payable          24,300 Supplies            1,920 cash            1,920                   -   cash            8,300                   -   revenue            8,300                   -   Insurance            2,200 cash            2,200                   -   Accounts receivable          12,220                   -   Revenue          12,220                   -   Truck expenses            1,010                   -   cash            1,010                   -   Utilities expense            3,510                   -   cash            3,510                   -   Miscellaneous expense            1,650                   -   cash            1,650                   -   cash            7,300                   -   accounts receivable            7,300                   -   wages            4,550                   -   cash            4,550                   -   Accounts payable            6,200                   -   cash            6,200                   -   dividends            2,400                   -   cash            2,400 Trial Balance Particulars Debit   Credit Cash      8,260 Common stock    26,000 Rent      3,800 Office Equipment    12,710 Accounts payable      6,510 Truck    30,400 notes payable    24,300 Supplies      1,920 Revenue    20,520 Insurance      2,200 Accounts receivable      4,920 Truck expense      1,010 Utilites exp      3,510 Mis exp      1,650 wages      4,550 Dividends      2,400    77,330    77,330 Income statement Revenue    20,520 Expenses: Rent    3,800 Insurance    2,200 Truck expense    1,010 Utilites exp    3,510 Mis exp    1,650 wages    4,550 Total expenses    16,720 Excess of income over expenses      3,800

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