Financial and Managerial Accounting (Looseleaf) (Custom Package)
Financial and Managerial Accounting (Looseleaf) (Custom Package)
6th Edition
ISBN: 9781259754883
Author: Wild
Publisher: MCG
Question
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Chapter 2, Problem 1PSA

1.

To determine

To prepare: journal entry for April transactions.

1.

Expert Solution
Check Mark

Explanation of Solution

Journal entries to record the transactions

1.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 1
Cash

80,000


Office Equipment

26,000


H.H Capital account


106,000

(Being Cash and equipment has been invested by the owner.)



Table (1)

  • Cash is an asset account. Here, asset balance has increased. Hence cash account is debited.
  • Office Equipment is an asset account. Here, asset balance has increased. Hence office equipment account is debited.
  • As the equity is raised by investing cash and equipment resulted in increased equity so increased in equity account is credited.

2

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 2
Prepaid Rent

9,000


Cash


9,000

(Being rent has been paid in advance.)



Table (2)

  • Prepaid rent belongs to asset accounts it has been debited as its payment resulted in increase in assets.
  • Cash is an asset account it has been credited for the payment of rent as it resulted in decrease in asset account.

3.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 3
Office supplies

3,600


Office equipment

8,000


Accounts Payable


11,600

(Being office supplies and equipment has been purchased on credit.)



Table (3)

  • Office supplies equipment belongs to asset accounts they have been debited as their purchase resulted in increase in assets.
  • Office equipment belongs to asset accounts they have been debited as their purchase resulted in increase in assets.
  • As the purchase is made on credit which causes increased liabilities account so it will record under accounts payable account.

6.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 6
Cash

4,000


Services fees earned


4,000

(Being cash earned for providing services.)



Table (4)

  • Cash is belonging to asset account so providing services in cash causes increase in asset account so debited.
  • Services have been provided so it will be credited as they will decrease the stock account.
  • 9.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 9
Accounts receivable

6,000


Service fees earned


6,000

(Being amount is going to receive later on.)



Table (5)

  • Account receivable is belonging to current asset account so providing services causes increase in asset account so debited.
  • Services have been provided so it recorded in credited account as they will decrease the stock account.

13.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 13
Accounts payable

11,600


Cash


11,600

(Being amount paid due.)



Table (6)

  • Accounts payable is a current liability account so payment of amount due will increase the liability account so debited.
  • Cash belongs to current asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.

19.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 19
Prepaid Insurance

2,400


Cash


2,400

(Being premium for insurance has been paid in advance)



Table (7)

  • Prepaid expense belongs to current asset account so there is an increase in asset account so it is debited.
  • While cash is also a part of asset account it is credited because there is decrease in cash account for the payment of premium..

22.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 22
Cash

4,400


Account Receivable


4,400

(Being cash for previously provided services)



Table (8)

  • Cash account is an asset account. Since cash is earned, so it is to be increased. Therefore, cash account is to be debited.
  • Account receivable is also belongs to asset account so receiving cash will decrease it so credited.

25.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 25
Accounts receivables

2,890


Services fees earned


2,890

(Being billed client for completed work.)



Table (9)

  • Accounts receivable is a current asset account as the amount due and not received so it causes increase in asset account so debited.
  • Services are credit as it is a part of asset account as they will decrease the stock account.

28.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 28
Dividends

5,500


Cash


5,500

(Being cash is paid in form of dividend..)



Table (10)

  • Since dividends has been paid which will increase equity so debited.
  • Cash is credited as dividends have been paid in cash which decrease the cash account so credited.

29.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 29
Office supplies

600


Accounts payable


600

(Being purchased on credit.)



Table (11)

  • Supplies belong to asset account they increase the asset account so debited.
  • While accounts payable is a current liability account so purchasing supplies on credit will increase them so credited.

30.

Date
Account Title and Explanation
Post.ref
Debit($)
Credit($)
April 30
Utility expense

435


Cash


435

(Being expenses paid.)



Table (12)

  • Utility expense account is an expense account. Since utility expense is increased, expense is to be increased. So, debit the utility expense account.
  • Cash account is an asset account. Since cash is shrinked, so it is to be reduced. Therefore, cash account is to be credited.
2

To determine

To prepare: ledger account

2

Expert Solution
Check Mark

Explanation of Solution

General ledger

Cash No.101
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 1.
Capital

80,000

80,000
APR 2.
Prepaid rent


9,000
71,000
APR 8
Service fees

4,000

75,000
APR 13
Accounts payable


11,600
63,400
APR 19
Prepaid Insurance


2,400
61,000
APR 22
Accounts Receivable

4,400

65,400
APR 28
Dividends


5,500
59,900
APR 30
Utility Expense


435
59,465

Table (15)

So the ending balance is $59,465

Account receivable No.106
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 12
Service fees

6,000

6,000
APR 22.
Cash


4,400
1,600
APR 24.
Servicer fees

2,890

4,490

Table (16)

So the ending balance is $4,490

Office supplies No.124
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 3.
Accounts payable

3,600

3,600
APR 29
Accounts payable

600

4,200

Table (17)

So the ending balance is $4,200

Office Equipment No.163

Date

Account Title and Explanation

Post ref

Debit

($)

Credit

($)

Balance

($)

APR 1.

Capital

26,000

26,000

APR 3.

Accounts payable

8,000

34,000

Table (18)

So the ending balance is $34,000.

Prepaid Insurance No.128
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 19
Cash

2,400

2,400

Table (19)

So the ending balance is $2,400

Prepaid rent No.131
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 2.
Cash

9,000

9,000

Table (20)

So the ending balance is $9,000

Capital No.301
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 1.
Cash


106,000
106,000
APR 28
Cash

5,500

100,500

Table (21)

So the ending balance is $53,000

Accounts payable No.201
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 4
Office equipment and supplies


11,600
11,600
APR 13.
Cash

11,600

0
APR 29.
Office supplies


600
600

Table (22)

So the ending balance is $600

Utility Expense .690
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 30
Cash

435

435

Table (23)

So the ending balance is $435

Dividends .302
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 28
Cash

5,300

5,300

Table (24)

So the ending balance is $5,300

Fees Earned No.403
Date
Account Title and Explanation
Post ref
Debit($)
Credit($)
Balance($)
APR 8
Cash


4,000
4,000
APR 12
Accounts receivable


6,000
10,000
APR 24
Accounts receivable


2,890
12,890

Table (25)

So the ending balance is $12,890

3.

To determine

To prepare: Trial balance

3.

Expert Solution
Check Mark

Explanation of Solution

Trial balance account

Company H
Trial Balance
April 30, 20XX
Accounts Title
Amount($)
Amount($)
Cash
59,465

Accounts Payable

600
Accounts Receivable
4,490

Office Supplies
4,200

Office Equipment
34,000

Prepaid Insurance
2,400

Prepaid Rent
9,000

Capital

100,500
Dividends
5,300

Fees earned

12,890
Utility expenses
435

Totals
113,990
113,990

Table (26)

So, total trial balance is $113,990.

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Chapter 2 Solutions

Financial and Managerial Accounting (Looseleaf) (Custom Package)

Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - APPLE Review the Apple balance sheet in Appendix...Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - QS 2-1 Identifying source documents C1 Identifying...Ch. 2 - Prob. 2QSCh. 2 - Reading a chart of accounts C3 A chart of accounts...Ch. 2 - Prob. 4QSCh. 2 - Prob. 5QSCh. 2 - Prob. 6QSCh. 2 - Prob. 7QSCh. 2 - identifying a posting error P2 A trial balance has...Ch. 2 - Prob. 9QSCh. 2 - Prob. 10QSCh. 2 - Exercise 2-1 Steps in analyzing and recording...Ch. 2 - Prob. 2ECh. 2 - Prob. 3ECh. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Prob. 12ECh. 2 - Prob. 13ECh. 2 - Prob. 14ECh. 2 - Prob. 15ECh. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Exercise 2-20 Identifying effects of posting...Ch. 2 - Prob. 21ECh. 2 - Prob. 22ECh. 2 - Prob. 23ECh. 2 - Prob. 1PSACh. 2 - Problem 2-2A Preparing and posting journal...Ch. 2 - Prob. 3PSACh. 2 - Prob. 4PSACh. 2 - Prob. 5PSACh. 2 - Prob. 6PSACh. 2 - Prob. 1PSBCh. 2 - Prob. 2PSBCh. 2 - Prob. 3PSBCh. 2 - Prob. 4PSBCh. 2 - Prob. 5PSBCh. 2 - Prob. 6PSBCh. 2 - Prob. 2SPCh. 2 - Prob. 1GLPCh. 2 - Prob. 2GLPCh. 2 - Prob. 3GLPCh. 2 - Prob. 1BTNCh. 2 - Prob. 2BTNCh. 2 - Prob. 3BTNCh. 2 - Prob. 4BTNCh. 2 - Prob. 5BTNCh. 2 - Prob. 6BTNCh. 2 - Prob. 7BTNCh. 2 - Prob. 8BTNCh. 2 - Prob. 9BTNCh. 2 - Prob. 10BTN
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