Journalize a series of transactions. 1 Stockholders invested $40,000 cash in the
ID: 2441838 • Letter: J
Question
Journalize a series of transactions.1 Stockholders invested $40,000 cash in the business in exchange for common stock.
4 Purchased land costing $30,000 for cash.
8 Incurred advertising expense of $1,800 on account.
11 Paid salaries to employee $1,500.
12 Hired park manager at a salary of $4,000 per month, effective May 1.
13 Paid $1,500 cash for a one year insurance policy.
17 Declared and paid a $1,000 cash dividend.
20 Received $5,700 in cash for admission fees.
25 Sold 100 coupon books for $25 each. Each book contains 10 coupons that entitle the holder to
1 admission per park.
30 Received $8,900 in cash admission fees.
30 Paid $900 on balance owed for advertisiing incurred on April 8.
Mendez uses the following account: Cash;Prepaid Insurance;Land;Accounts payable;Unearned Admissions Revenue; Common Stock;Dividends; Admission Revenue; Advertising Expense; and Salaries Expense.
Journalize transactions, post, and prepare a trial balance.
II) Jane Kent is a Licensed CPA. During the first month of operations of her business, Jane Kent Inc, the following events and transactions occurred.
May 1 Stockholders invested $25,000 cash in exchange for common stock.
2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $2,500 of supplies on account from Read Supply Company.
7 Paid office rent of $900 cash for the month.
11 Completed a tax assignment and billed client $2,100 for services provided.
12 Received $3,500 advance on a management consulting engagement .
17 Received cash of $1,200 for services completed for H. Arnold Co.
31 Paid Secretary-receptionist $2,000 salary for the month.
31 Paid 40% of balance due Read Supply Company.
Jane uses the following chart accounts: No. 101 Cash, Mo. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 205 Unearned Revenue, No.311 Common Stock, No. 400 Service Revenue, no. 726 Salaries Expense, and No. 729, Rent Expense.
Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts
(c) Prepare a trial balance on May 31,2008.
Explanation / Answer
Date
Particulars
Amount (Dr.)
Amount (Cr.)
April. 1
Cash
$40,000
Capital stock
$40,000
(Owners invest cash in the business)
4
Land
$30,000
Cash
$30,000
(Purchased land)
8
Advertising Expenses
$1,800
Cash
$1,800
(Paid advertisement expenses)
11
Salaries
$1,500
Cash
$1,500
(Paid salaries)
13
Pre-paid Insurance
$1,500
Cash
$1,500
(To record pre-paid insurance policy amount)
17
Dividends
$1,000
Cash
$1,000
(Paid cash dividends)
20
Cash
$5,700
Admission fees
$5,700
(To record receipt of admission fees)
25
Cash
$2,500
Unearned Admission Revenue
$2,500
(To record unearned admission revenue)
30
Cash
$8,900
Admission fees
$8,900
(To record receipt of admission fees)
30
Advertising Expenses
$900
Cash
$900
(To record advertisement t expenses)
Date
Particulars
Amount Dr.
Amount Cr.
1-May
Cash
$25,000
Capital Stock
25,000
(Owners invest cash in the business)
3
Supplies
2,500
Accounts payable
2,500
(Purchases from Read supply company)
7
Rent
900
Cash
900
(Paid office rent)
11
Accounts Receivable
2,100
Unearned revenue
2,100
(Billed clients for consulting services rendered)
12
Cash
3,500
Unearned revenue
3,500
(Cash received)
17
Cash
1,200
Consulting Revenue
1,200
(Cash received)
31
Salary
2,000
Cash
2,000
(Paid salaries)
31
Accounts payable
1,000
Cash
1,000
(Cash paid to supplies)
Cash Account
1-May
Capital Stock
25,000
7-May
Rent
900
12-May
Unearned Revenue
3,500
31-May
Salary
2000
17-May
Consulting revenue
1,200
31-May
Accounts payable
1000
Closing balance
25,800
1-Jun
Opening balance
25,800
Capital Stock
1-May
Cash
25,000
Salary Account
31-May
Cash
$2,000
Supplies Account
3-May
Accounts payable
2,500
Accounts payable
31-May
Cash
1,000
3-May
Supplies
2,500
Rent
7-May
Cash
900
Accounts receivables
5/`11
Unearned revenue
2,100
Unearned Revenue
11-May
Accounts receivables
2,100
12-May
Cash
3,500
Closing balance
5,600
Consulting Revenue
17-May
Cash
1,200
Trail Balance
Particulars
Debit
credit
Cash
25,800
Capital stock
25,000
Salaries
2,000
Supplies
2,500
Accounts payable
1,500
Rent
900
Accouonts receivables
2,100
Unearned Revenue
5,600
Consulting revenue
1,200
Total
33,300
33,300
Date
Particulars
Amount (Dr.)
Amount (Cr.)
April. 1
Cash
$40,000
Capital stock
$40,000
(Owners invest cash in the business)
4
Land
$30,000
Cash
$30,000
(Purchased land)
8
Advertising Expenses
$1,800
Cash
$1,800
(Paid advertisement expenses)
11
Salaries
$1,500
Cash
$1,500
(Paid salaries)
13
Pre-paid Insurance
$1,500
Cash
$1,500
(To record pre-paid insurance policy amount)
17
Dividends
$1,000
Cash
$1,000
(Paid cash dividends)
20
Cash
$5,700
Admission fees
$5,700
(To record receipt of admission fees)
25
Cash
$2,500
Unearned Admission Revenue
$2,500
(To record unearned admission revenue)
30
Cash
$8,900
Admission fees
$8,900
(To record receipt of admission fees)
30
Advertising Expenses
$900
Cash
$900
(To record advertisement t expenses)
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