Principles of Accounting 1 Chapter 2 Homework Cynthia Jackson, an accountant, or

Question

Principles of Accounting 1
Chapter 2 Homework

Cynthia Jackson, an accountant, organized Jackson and Associates on September 1, 2015. During the month, Jackson and Associates completed the following transactions:

a. Issued capital stock to Cynthia Jackson in exchange for $75,000.
b. Paid advertising expenses using cash, $2,900.
c. Billed customers for fees earned for providing accounting services, $22,800.
d. Purchase office supplies on account, $6,500.
e. Paid office salaries, $4,200.
f. Paid rent expense for the month, $3,800.
g. Received cash from customers on account, $20,000.
h. Paid creditors on account, $5,500.
i. Paid dividends, $1,800.
j. Determined that the cost of supplies on hand was $3,500; therefore, the cost of supplies used was $3,000.

Instructions
1. Journalize the entries for transactions (a) through (j).
2. Prepare T accounts using all accounts utilized to make the journal entries. Post the journal entries to these T accounts. Determine the account balances, after all posting is complete.
3. Prepare an unadjusted trial balance as of September 30, 2015.
4. Determine net income and net effect on retained earnings for September.

Explanation / Answer

Ans-

JE

Account

Account Receivable

office supplies

office salaries

Cash

Supplies Payable

Dividend Paid

Cost of supplies on used

Advertising and promotion

Ledger-

Jackson and Associates

Jackson and Associates

Net income= $8900

Retained Earning=Net income-Dividend

=$8,900-1,800

=$7,100

Account

Debit Credit Cash 75,000 Capital Stock 75,000

Account Receivable

22,800 Accounting services 22,800

office supplies

    6,500 Supplies Payable     6,500

office salaries

    4,200 Cash     4,200 Rent     3,800 Cash     3,800

Cash

20,000 Account Receivable 20,000

Supplies Payable

    5,500 Cash     5,500

Dividend Paid

    1,800 Cash     1,800

Cost of supplies on used

    3,000 office supplies     3,000

Advertising and promotion

    2,900 Cash     2,900

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