Concept explainers
1.
Journalize the given transaction.
1.
Explanation of Solution
Debit: A debit, is an accounting term that refers to the left side of an account. The term debit is be denoted by (Dr). The recording amount on the left side of the account is known as debiting.
Credit: A credit, is an accounting term that refers to the right side of an account. The term credit is denoted as (Cr). The recording amount on the right side of the account is known as crediting.
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all the increase in the assets, the expenses and the dividends, all the decrease in liabilities, revenues and the stockholders’ equities.
- Credit, all the increase in the liabilities, the revenues, and the stockholders’ equities, and all decreases in the assets, and the expenses.
Pass the journal entries for the given transactions:
General Journal | Page - 1 | |||
Date | Description | Post | Debit | Credit |
2019 | ||||
June 1 | Cash | 101 | $20,000 | |
ILCapital | 301 | $20,000 | ||
(To record the receipt of capital) | ||||
June 2 | Rent expense | 514 | $2,000 | |
Cash | 101 | $2,000 | ||
(To record the payment of rent, Check 1001) |
Table (1)
General Journal | Page - 2 | |||
Date | Description | Post | Debit | Credit |
2019 | ||||
June 5 | Office Equipment | 141 | $9,500 | |
Accounts payable | 202 | $9,500 | ||
(To record the purchase of office equipment on account Invoice 5312) | ||||
June 6 | Photographic Equipment | 151 | $2,100 | |
Cash | 101 | $2,100 | ||
(To record the purchase of photographic equipment for cash, Check 1002) | ||||
June 7 | Supplies | 121 | $550 | |
Cash | 101 | $550 | ||
(To record the purchase of supplies for cash, Check 1003) | ||||
June 10 | Office Cleaning Expense | 511 | $800 | |
Cash | 101 | $800 | ||
(To record the payment of office cleaning expense, Check 1004) | ||||
June 12 | Cash | 101 | $2,600 | |
Accounts receivable | 111 | $2,600 | ||
Fees Income | 401 | $5,200 | ||
(To record the services provided for cash and on account) | ||||
June 15 | Cash | 101 | $1,800 | |
Supplies | 121 | $1,800 | ||
(To record the return of damaged supplies for cash refund) | ||||
June 18 | Office Equipment | 141 | $2,250 | |
Cash | 101 | $500 | ||
Accounts payable | 202 | $1,750 | ||
(To record the purchase of Equipment on account Invoice 304; and issued Check 1005 for down payment) |
Table (2)
General Journal | Page - 3 | |||
Date | Description | Post | Debit | Credit |
2019 | ||||
June 20 | Accounts payable | 202 | $2,500 | |
Cash | 101 | $2,500 | ||
(To record the payment for office supplies, Invoice 5312 by Check 1006) | ||||
June 26 | Accounts receivable | 111 | $2,500 | |
Fees income | 401 | $2,500 | ||
(To record the service provided on account) | ||||
June 27 | Telephone expense | 520 | $632 | |
Cash | 101 | $632 | ||
(To record the payment of telephone bill, Check 1007) | ||||
June 30 | Cash | 101 | $2,300 | |
Accounts receivable | 111 | $2,300 | ||
(To record the receipt of fees) | ||||
Utilities expense | 523 | $750 | ||
Cash | 101 | $750 | ||
(To record the payment of utility bill, Check 1008) | ||||
Salaries expense | 517 | $6,550 | ||
Cash | 101 | $6,550 | ||
(To record the payment of salaries, Checks 1009-1011) |
Table (3)
2.
2.
Explanation of Solution
General ledger:
General ledger is a record of all accounts of assets, liabilities, and
Post the journal entries in the General Ledger:
GENERAL LEDGER | ||||||
ACCOUNT: Cash | Account No.: 101 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 1 | J1 | $ 20,000 | $ 20,000 | |||
June 2 | J1 | $ 2,000 | $ 18,000 | |||
June 6 | J2 | $ 2,100 | $ 15,900 | |||
June 7 | J2 | $ 550 | $ 15,350 | |||
June 10 | J2 | $ 800 | $ 14,550 | |||
June 12 | J2 | $ 2,600 | $ 17,150 | |||
June 15 | J2 | $ 180 | $ 17,330 | |||
June 18 | J2 | $ 500 | $ 16,830 | |||
June 20 | J2 | $ 2,500 | $ 14,330 | |||
June 27 | J3 | $ 632 | $ 13,698 | |||
June 30 | J3 | $ 2,300 | $ 15,998 | |||
June 30 | J3 | $ 750 | $ 15,248 | |||
June 30 | J3 | $ 6,550 | $ 8,698 | |||
ACCOUNT: Accounts receivable | Account No.: 111 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 12 | J1 | $ 2,600 | $ 2,600 | |||
June 26 | J3 | $ 2,500 | $ 5,100 | |||
June 30 | J3 | $ 2,300 | $ 2,800 |
Table (4)
GENERAL LEDGER | ||||||
ACCOUNT: Supplies | Account No.: 121 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 7 | J2 | $ 550 | $ 550 | |||
June 15 | J2 | $ 180 | $ 370 | |||
ACCOUNT: Office Equipment | Account No.: 141 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 5 | J2 | $ 9,500 | $ 9,500 | |||
June 18 | J2 | $ 2,250 | $ 11,750 | |||
ACCOUNT: Photographic Equipment | Account No.: 151 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 6 | J2 | $ 2,100 | $ 2,100 | |||
ACCOUNT: Accounts payable | Account No.: 202 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 5 | J2 | $ 9,500 | $ 9,500 | |||
June 18 | J2 | $ 1,750 | $ 11,250 | |||
June 20 | J3 | $ 2,500 | $ 8,750 | |||
ACCOUNT: IL Capital | Account No.: 301 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 1 | J1 | $ 20,000 | $ 20,000 | |||
ACCOUNT: IL Drawings | Account No.: 302 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 |
Table (5)
GENERAL LEDGER | ||||||
ACCOUNT: Fees Income | Account No.: 401 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 12 | J2 | $ 5,200 | $ 5,200 | |||
June 26 | J3 | $ 2,500 | $ 7,700 | |||
ACCOUNT: Office Cleaning Expense | Account No.: 511 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 10 | J2 | $ 8,000 | $ 8,000 | |||
ACCOUNT: Rent Expense | Account No.: 514 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 2 | J1 | $ 2,000 | $ 2,000 | |||
ACCOUNT: Salaries Expense | Account No.: 517 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 30 | J3 | $ 6,550 | $ 6,550 | |||
ACCOUNT: Telephone Expense | Account No.: 520 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 27 | J3 | $ 632 | $ 632 | |||
ACCOUNT: Utilities Expense | Account No.: 523 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
June 30 | J3 | $ 750 | $ 750 |
Table (6)
The cash balance after the transaction on June 27th was $13,698.
Want to see more full solutions like this?
Chapter 4 Solutions
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
- As the bookkeeper of a new start-up company, you are responsible for keeping the chart of accounts up to date. At the end of each year, you analyze the accounts to verify that each account should be active for accumulation of costs, revenues, and expenses. In July, the accounts payable clerk has asked you to open an account named New Expenses. You know that an account name should be specific and well defined. You feel that the A/P clerk might want to charge some expenses to that account that would not be appropriate. Why do you think the A/P clerk needs this New Expenses account? Who needs to know this information and what action should you consider?arrow_forwardPlease verify that all June 1 balances are in the ledgers by comparing them to the May 31, 2021 trial balance before posting. There are two tabs in the Excel spreadsheet: Income Statement Accounts and Balance Sheet Accounts. You will need both tabs to post to all the accounts. Use the given information from the General Journal below to fill in the Ledger for the balance sheet and income statement account sheets through the month of June. General Journal Date Description Post Ref. Debit Credit June 3 Inventory 116 50,400 Accounts Payable 210 50,400 June 6 Accounts Receivable 111 17,400 Sales 410 17,400 Costs Of Goods Sold 510 12,000 Inventory 116 12,000 June 8 Notes Receivable 114 500 Bad Debt Expense 522 500 June 10 Cash 104 40,000 Salaries Payable 211 40,000 Cash 104 26,000 Office Salaries Expense…arrow_forwardSage Learning Centers was established on July 20 to provide educational services. The services provided during the remainder of the month are as follows: Instructions 1. Journalize the transactions for July, using a single-column revenue journal and a two-column general journal. Post to the following customer accounts in the accounts receivable ledger and insert the balance immediately after recording each entry: D. Chase; J. Dunlop; F. Mintz; T. Quinn; K. Tisdale. 2. Post the revenue journal and the general journal to the following accounts in the general ledger, inserting the account balances only after the last postings: 3. a. What is the sum of the balances of the customer accounts in the subsidiary ledger at July 31? b. What is the balance of the accounts receivable controlling account at July 31? 4. Assume Sage Learning Centers began using a computerized accounting system to record the sales transactions on August 1. What are some of the benefits of the computerized system over the manual system?arrow_forward
- Sage Learning Centers was established on July 20, 2016, to provide educational services. The services provided during the remainder of the month are as follows: Instructions 1. Journalize the transactions for July, using a single-column revenue journal and a two-column general journal. Post to the following customer accounts in the accounts receivable ledger, and insert the balance immediately after recording each entry: D. Chase; J. Dunlop; F. Mintz; T. Quinn; K. Tisdale. 2. Post the revenue journal and the general journal to the following accounts in the general ledger, inserting the account balances only after the last postings: 3. a. What is the sum of the balances of the customer accounts in the subsidiary ledger at July 31? b. What is the balance of the accounts receivable controlling account at July 31? 4. Assume Sage Learning Centers began using a computerized accounting system to record the sales transactions on August 1. What are some of the benefits of the computerized system over the manual system?arrow_forwardThis problem is designed to enable you to apply the knowledge you have acquired in the preceding chapters. In accounting, the ultimate test is being able to handle data in real life situations. This problem will give you valuable experience. CHART OF ACCOUNTS You are to record transactions in a two-column general journal. Assume that the fiscal period is one month. You will then be able to complete all of the steps in the accounting cycle. When you are analyzing the transactions, think them through by visualizing the T accounts or by writing them down on scratch paper. For unfamiliar types of transactions, specific instructions for recording them are included. However, reason them out for yourself as well. Check off each transaction as it is recorded. Required 1. Journalize the transactions. (Start on page 1 of the general journal if using Excel or Working Papers.) 2. Post the transactions to the ledger accounts. (Skip this step if using CLGL.) 3. Prepare a trial balance. (If using a work sheet, use the first two columns.) 4. Data for the adjustments are as follows: a. Insurance expired during the month, 1,000. b. Depreciation of pool structure for the month, 715. c. Depreciation of fan system for the month, 260. d. Depreciation of sailboats for the month, 900. e. Wages accrued at June 30, 810. Your instructor may want you to use a work sheet for these adjustments. 5. Journalize adjusting entries. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL.) 7. Prepare an adjusted trial balance 8. Prepare the income statement 9. Prepare the statement of owners equity. 10. Prepare the balance sheet. 11. Journalize closing entries. 12. Post closing entries to the ledger accounts. (Skip this step if using CLGL.) 13. Prepare a post-dosing trial balance. Check Figure Trial balance total, 281,858; net income, 7,143; post-dosing trial balance total, 263,341arrow_forwardThis problem is designed to enable you to apply the knowledge you have acquired in the preceding chapters. In accounting, the ultimate test is being able to handle data in real-life situations. This problem will give you valuable experience. CHART OF ACCOUNTS You are to record transactions in a two-column general journal. Assume that the fiscal period is one month. You will then be able to complete all of the steps in the accounting cycle. When you are analyzing the transactions, think them through by visualizing the T accounts or by writing them down on scratch paper. For unfamiliar types of transactions, specific instructions for recording them are included. However, reason them out for yourself as well. Check off each transaction as it is recorded. Required 1. Journalize the transactions. (Start on page 1 of the general journal if using Excel or Working Papers.) 2. Post the transactions to the ledger accounts. (Skip this step if using CLGL.) 3. Prepare a trial balance. (If using a work sheet, use the first two columns.) 4. Data for the adjustments are as follows: a. Insurance expired during the month, 1,020. b. Depreciation of building for the month, 480. c. Depreciation of pool/slide facility for the month, 675. d. Depreciation of pool furniture for the month, 220. e. Wages accrued at July 31, 920. Your instructor may want you to use a work sheet for these adjustments. 5. Journalize adjusting entries. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL.) 7. Prepare an adjusted trial balance. 8. Prepare the income statement. 9. Prepare the statement of owners equity. 10. Prepare the balance sheet. 11. Journalize closing entries. 12. Post closing entries to the ledger accounts. (Skip this step if using CLGL.) 13. Prepare a post-closing trial balance. Check Figure Trial balance total, 601,941; net income, 16,293; post-closing trial balance total, 569,614arrow_forward
- The chart of accounts of Ethan Academy is shown here, followed by the transactions that took place during December of this year. Required Record these transactions in the general journal, including a brief explanation for each entry. If you are using working papers, number the journal pages 31 and 32.arrow_forwardBlue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.arrow_forwardLeanders Landscaping Service maintains the following chart of accounts: The following transactions were completed by Leander: Required 1. Journalize the transactions in the general journal. Prepare a brief explanation for each entry. 2. If you are using working papers, write the name of the owner on the Capital and Drawing accounts. 3. Post the journal entries to the general ledger accounts. (Skip this step if you are using CLGL.) 4. Prepare a trial balance dated April 30, 20. If you are using CLGL, use the year 2020 when recording transactions and preparing reports.arrow_forward
- As the bookkeeper of a new start-up company, you are responsible for keeping the chart of accounts up to date. At the end of each year, you analyze the accounts to verify that each account should be active for acumulation of costs, revenues, and expenses. In July, the accounts payable (A/P) clerk asked you to open an account named New Expenses. You know that an account name should be specific and well defined, and you're afraid the A/P clerk might charge some expenses to the account that are inappropriate. Respond to the following in a minimum of 175 words: *Why do you think the A/P clerk needs the New Expenses account? * Who needs to know this information and what action should you consider?arrow_forwardYou have recently been hired by Trinity College as an accounting assistant. Trinity College is a private institution. During your first month as an employee of Trinity College, the school’s accountant was fired. The owner of the school has asked for your help in preparing the next set of financial accounts to 31 October 2020. You eagerly begin to assist with the preparation of the next set of financial accounts to 31 October 2019. Firstly, you locate the account balances related to 30 September 2020:- Cash at bank $267,000; Furniture and fittings $24,000; Equipment $60,000; Capital $351,900; Accounts receivable – T. Steward - $6,900; Accounts payable - R. Maskell- $6,000. Secondly you identify the transactions that occurred during October 2020. On Oct 1 2020, The owner withdrew $6,000 from the business bank account for personal reasons. On Oct 1 2020, Trinity College paid $6,000 towards the amount owed to R. Maskell. On Oct 1 2020Trinity College paid business insurance for the next 12…arrow_forwardPrepare journal entries for the following transactions. Make sure to observe the proper format of journal entries. Use EXCEL in presenting your answers. Mr. Panatag opened the Panatag Security Services. The following financial transactions and other arrangements took place from July 01 to August, 2019: July 01 Mr. Panatag invested his savings in the business amounting to P895,000, and his old car with market value of P545,000. July 02 Mr. Panatag signed a lease contract to be used as the office of his business. In accordance with the lease contract, Mr. Panatag paid the advance rental for three months amounting to P60,000. July 03 The owner purchased furniture amounting to P50,00. Paid 70% cash and the balance will be paid after 30 days. July 04 Mr. Panatag conducted interviews of security guards, and hired 10 security guards with a monthly salary of P13,000 per month. July 05 The owner secured a loan from the bank amounting to P250,000 payable over the…arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT