The following is an in-class exercise. You should not attempt the exercise prior
ID: 2539316 • Letter: T
Question
The following is an in-class exercise. You should not attempt the exercise prior to class. JOURNAL ENTRIES AND T-ACCOUNT ILLUSTRATION PROBLEM ooldridge decides to start a new business, Wooly Consulting, a firm specializing in placing out of work coaches with jobs, giving coaching seminars and public speaking engagements. During the month of June 20XX he completed the following transactions Required: St ep 1: Prepare general journal entries to record the transactions in the provided general journal. Step 2: Post the entry amounts to the T-accounts represented in the general ledger as you Read the preparation tips that appear after the transactions on the next page NOW! Step 3: Prepare a trial balance for Wooly Consulting as of June 30, 20xx. June 1 Jim began his business by transferring equipment valued at $4.200 into the business. He also placed $8,000 cash in a business checking account. He applied for and received a new credit card for the busines June 1 Jim purchased a car, costing $20,000 by paying $4,000 cash and signed a note for June 1 Jim purchased a new computer for $900 and supplies for $200, all on open account June 2 Jim filled bought gasoline for the car, $55. He put the purchase on the new credit card the balance with Biggs auto dealership. The note provides for a 10% APR interest cost. payment terms 1/10, n/30 Jim's first customer Larry Brown, prepays Jim to do a job search for him. Larry gives Jim $3,000 cash in advance Jim receives $500 cash for a speaking engagement on the Triangle offence scheme. Jim hires a former player of his, "Hoops Wilson as an assistant to work with him, to be paid $10 an hour Jim put travel expenses for a motel room and food on the credit card, $445 June 3 June 5 June 7 June 8 June 9 Jim receives a bill or an ad he had placed in Coaches Anonymous magazine advertising Wooly Consulting. The ad ran last week. The bill is for $220, due in 10 days. There is an 18% APR interest charge on overdue accounts. June 10 Jim purchased office supplies at Staples for $140. paying cash. June 12 Jim purchased an insurance policy for 12 months' coverage on the car from NoState Insurance. He was required to pay a full year in advance, $2.400 the June 3 event above. the Olympic winter games, $2,000 interest and principal. Hint: there has been 20 days since the loan began on June1 June 13 Found Larry Brown a job with Tennessee State University. Hint: This event is related to June 13 Billed on account, two hockey coaches for consulting on how to beat the Canadians in June 14 Paid Hoops, the assistant for 40 hours' work. June 21 Made a $640 payment on the note signed for the car. This payment consists of both Round the interest calculation result to the nearest dollar. June 21 Paid Hoops, the assistant for 40 hours' work June 22 Received the utility bill for $280, however it is not due for 15 days June 23 Received payment from one of the hockey coaches billed on June 13, $1,000 une 24 Found Bob Huggins a job with the West Virginia Hill Hoppers, billed him $4,300 June 25 Paid the bill for the computer purchased on June 1 Transactions continue on the next page Module Homework 4--12Explanation / Answer
Date Account Title Debit Credit 1-Jun Equipment 4200 Cash 8000 Jim Capital 12200 Vehicles 20000 Cash 4000 Note Payable 16000 Office Equipment 900 Supplies 200 Accounts payable 1100 (1/10,n/30) 2-Jun Fuel expense 55 Credit card payable 55 3-Jun Cash 3000 Unearned Revenue 3000 7-Jun No ENTRY 8-Jun Travel expense 445 Credit card payable 445 9-Jun Advertising expense 220 Accounts Payable 220 10-Jun Supplies 140 Cash 140 12-Jun Insurance expense 2400 Cash 2400 13-Jun Unearned Revenue 3000 Consulting Revenue 3000 Accounts receivable 2000 Consulting Revenue 2000 14-Jun Salaries expense 400 Cash 400 (40hrs.*$ 10) 21-Jun Note payable 529 Interest expense(20000*10%*20/360) 111 Cash 640 (20000*10%*20/360) 22-Jun Utilities expense 280 Accounts payable 280 23-Jun Cash 1000 Accounts receivable 1000 24-Jun Accounts receivable 4300 Consulting Revenue 4300 25-Jun Accounts payable 900 Cash 900 28-Jun Salaries expense 400 Cash 400 (40hrs.*$ 10) 29-Jun Advertising expense 400 Accounts payable 400 30-Jun Supplies expense 100 Supplies 100 Jim Drawings 300 Cash 300 Utilities expense 220 Cash 220 Credit card payable 500 Cash 500 Accounts payable 220 Interest expense(220*18%*11/360) 1 Cash 221 54221 54221 LEDGER ACCOUNTS Net Ledger balances Date Account Title Debit Credit Debit Credit 30-Jun Accounts payable 220 1-Jun Accounts payable 1100 9-Jun Accounts Payable 220 22-Jun Accounts payable 280 25-Jun Accounts payable 900 29-Jun Accounts payable 400 880 13-Jun Accounts receivable 2000 23-Jun Accounts receivable 1000 24-Jun Accounts receivable 4300 5300 9-Jun Advertising expense 220 29-Jun Advertising expense 400 620 1-Jun Cash 8000 1-Jun Cash 4000 3-Jun Cash 3000 10-Jun Cash 140 12-Jun Cash 2400 14-Jun Cash 400 21-Jun Cash 640 23-Jun Cash 1000 25-Jun Cash 900 28-Jun Cash 400 30-Jun Cash 300 30-Jun Cash 220 30-Jun Cash 500 30-Jun Cash 221 1879 13-Jun Consulting Revenue 3000 13-Jun Consulting Revenue 2000 24-Jun Consulting Revenue 4300 9300 2-Jun Credit card payable 55 8-Jun Credit card payable 445 30-Jun Credit card payable 500 0 1-Jun Equipment 4200 4200 2-Jun Fuel expense 55 55 12-Jun Insurance expense 2400 2400 21-Jun Interest expense 111 30-Jun Interest expense 1 112 1-Jun Jim Capital 12200 12200 30-Jun Jim Drawings 300 300 1-Jun Note Payable 16000 21-Jun Note payable 529 15471 1-Jun Office Equipment 900 900 14-Jun Salaries expense 400 28-Jun Salaries expense 400 800 1-Jun Supplies 200 10-Jun Supplies 140 30-Jun Supplies 100 240 30-Jun Supplies expense 100 100 8-Jun Travel expense 445 445 3-Jun Unearned Revenue 3000 13-Jun Unearned Revenue 3000 0 22-Jun Utilities expense 280 30-Jun Utilities expense 220 500 1-Jun Vehicles 20000 20000 54221 54221 37851 37851 Trial Balance as at Jan.31 Debit Credit Cash 1879 Accounts receivable 5300 Supplies 240 Office Equipment 900 Equipment 4200 Vehicles 20000 Accounts payable 880 Note payable 15471 Jim Capital 12200 Jim Drawings 300 Consulting Revenue 9300 Advertising expense 620 Fuel expense 55 Insurance expense 2400 Interest expense 112 Salaries expense 800 Supplies expense 100 Travel expense 445 Utilities expense 500 37851 37851
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