The following transactions occurred during the year 1999: March 1, lawyer Abdala
ID: 2511581 • Letter: T
Question
The following transactions occurred during the year 1999:
March 1, lawyer Abdalaziz begins his own business as a real estate with a cash investment of 100,000$.
On March 2, $20000 was paid as a rent for the office.
On March 3, he purchased office equipment for10000$ paid 2000 cash and 8000 on credit .
On March 3, he purchased supplies for 500$ cash.
On march 10, $1500 was paid for advertising expenses
On March 20, he paid workers salaries s of $ 3,000 cash.
On March 1, Abdalaziz borrowed 10,000$ by signing 5%, one-year note on April1, 2000.
April 23, Purchased a one-year fire insurance policy for 30,000$.
On May 1, he withdrew $ 1000 in cash for personal use.
On Jun 7, he performed a legal services for clients for $5000 cash
On Jun 20, he performed a legal service for client for $10000 of service he received cash of 6000 and it bill the balance 4000 on account.
On July 31, used office supply during the month $150
On august 17,$500 paid cash as apaymant of equipment cridet
On October 1,hr received 1800 in cash from client who had been billed .
Utilities expense incurred but not paid on March 31, 1999.250$ .
Adjustment data
The equipment purchased on March 3, 1999, is being depreciated using the straight-line method over 10 years, with a salvage value of $1,800.
Abdalaziz Law office estimates that uncollectible accounts receivable at year-end is $2200.
The short-term note is dated march 1, 1999, and carry a 5% interest rate.
Prepare journal entries for each transactions and the adjusting entries and post to the ledger
Explanation / Answer
Date Account Title Debit Credit 1-Mar Cash 100000 Abdalaziz Capital 100000 Cash 10000 5% One Year Note 10000 2-Mar Rent expense 20000 Cash 20000 3-Mar Office equipment 10000 Cash 2000 Accounts payable 8000 Supplies 500 Cash 500 10-Mar Advertising expense 1500 Cash 1500 20-Mar Salaries expense 3000 cash 3000 23-Apr Insurance expense 30000 Cash 30000 1-May Drawings 1000 Cash 1000 7-Jun Cash 5000 Legal Service fees 5000 20-Jun Cash 6000 Accounts Receivable 4000 Legal Service fees 10000 31-Jul Supplies expense 150 Supplies 150 17-Aug Accounts payable 500 Cash 500 Oct.1 Cash 1800 Accounts Receivable 1800 Utilities expense 250 Accounts payable 250 Adjustment entries Depreciation expense 683 Accumulated depn.Equipment 683 (10000-1800)/10yrs.*10 mths/12 mths. Uncollectible expense 2200 Accounts Receivable 2200 Interest expense 417 Interest payable 417 (10000*5%*10/12) Prepaid Insurance 20000 Insurance expense 20000 (30000/12*8 mths) 217000 217000 NOTE: Dec. fiscal year end assumed LEDGER ACCOUNTS Net Ledger balances Date Account Title Debit Credit Debit Credit 5% One Year Note 10000 10000 Abdalaziz Capital 100000 100000 Accounts payable 8000 17-Aug Accounts payable 500 Accounts payable 250 7750 Accounts Receivable 4000 Accounts Receivable 1800 Accounts Receivable 2200 0 Accumulated depn.Equipment 683 683 10-Mar Advertising expense 1500 1500 Uncollectible Expense 2200 2200 1-Mar Cash 100000 Cash 10000 Cash 20000 Cash 2000 Cash 500 Cash 1500 cash 3000 Cash 30000 Cash 1000 7-Jun Cash 5000 20-Jun Cash 6000 Cash 500 Oct.1 Cash 1800 64300 Depreciation expense 683 683 1-May Drawings 1000 1000 23-Apr Insurance expense 30000 Insurance expense 20000 10000 Interest expense 417 417 Interest payable 417 417 Legal Service fees 5000 Legal Service fees 10000 15000 3-Mar Office equipment 10000 10000 Prepaid insurance 20000 20000 2-Mar Rent expense 20000 20000 20-Mar Salaries expense 3000 3000 Supplies 150 Supplies 500 350 31-Jul Supplies expense 150 150 Utilities expense 250 250 217000 217000 133850 133850 TRIAL BALANCE Cash 64300 Accounts Receivable 0 Supplies 350 Prepaid Insurance 20000 Office equipment 10000 Accumulated depn.Equipment 683 Accounts payable 7750 Interest payable 417 5% One Year Note 10000 Abdalaziz Capital 100000 Drawings 1000 Legal Service fees 15000 Advertising expense 1500 Uncollectible Expense 2200 Depreciation expense 683 Insurance expense 10000 Interest expense 417 Rent expense 20000 Salaries expense 3000 Supplies expense 150 Utilities expense 250 Totals 133850 133850
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