Concept explainers
1.
Introduction:
To prepare: The general journal entries for the following transaction.
1.
Explanation of Solution
Journal entries of KT for the month of April are shown below.
Date | Particular | PR | Dr.$ | Cr.$ |
a. | Cash | 101 | 65,000 | |
Office equipment | 163 | 5750 | ||
Computer equipment | 164 | 30,000 | ||
To Common stock | 307 | 100,750 | ||
(Owner’s investment) | ||||
b. | Land | 172 | 22,000 | |
Cash | 101 | 5000 | ||
Note payable | 250 | 17,000 | ||
(To record land purchase) | ||||
c. | Building | 170 | 34,500 | |
Cash | 101 | 34,500 | ||
(building purchased on cash) | ||||
d. | Prepaid Insurance | 108 | 5000 | |
Cash | 101 | 5000 | ||
(Insurance premium paid) | ||||
e. | Cash | 4600 | ||
Fees earned | 4600 | |||
(received cash for service provided) | ||||
f. | Computer equipment | 164 | 4500 | |
Cash | 101 | 800 | ||
Note payable | 250 | 3700 | ||
(purchase of computer equipment by paying cash and signing notes payable) | ||||
g. | Account receivable | 106 | 4250 | |
Fees earned | 402 | 4250 | ||
(service provided on credit) | ||||
h. | Office equipment | 163 | 950 | |
Account payable | 201 | 950 | ||
(purchase of office equipment on credits) | ||||
i. | Account receivable | 106 | 10,200 | |
Fees earned | 402 | 10,200 | ||
(service provided on credit) | ||||
j. | Equipment rental expense | 602 | 580 | |
Account payable | 580 | |||
(equipment rental cost is due) | ||||
101 | 5100 | |||
k. | Cash | 106 | 5100 | |
Account receivable | ||||
(cash received from client ) | ||||
l. | Wages expense | 601 | 1800 | |
cash | 101 | 1800 | ||
(cash paid for wages) | ||||
m. | Account payable | 201 | 950 | |
cash | 101 | 950 | ||
(cash paid that was due) | ||||
n. | Repair Expense | 604 | 608 | |
Cash | 106 | 608 | ||
(paid cash for repair equipment) | ||||
o. | Dividends | 319 | 6230 | |
Cash | 101 | 6230 | ||
(dividend paid on cash) | ||||
p. | Wages | 601 | 1800 | |
Cash | 101 | 1800 | ||
(wages paid by cash) | ||||
q. | Advertisement | 603 | 750 | |
Cash | 101 | 750 | ||
(paid cash for advertisement) | ||||
2.
Introduction: Journal entry is a technique of booking and recording financial transactions on any company. Ledger is used to record all economic transactions of the account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.
To prepare: T account for the following transactions.
2.
Answer to Problem 2PSB
Balance of T account for cash $17,262, account receivable $9350, office equipment$6700, Building $434500, office supplies $500, note payable $20700, Account payable $580, utilities $540, Common stock $100750, dividend $6230, fees earned $19050, wages expense$3600, Land $22000, computer equipment 34500, equipment rental expense 580, repair expense $608 and advertisement expense $750
Explanation of Solution
Cash Account No.101 | ||||
Date | PR | Debit $ | Credit $ | Balance$ |
a. | 65,000 | 65,000 | ||
b. | 5000 | 60,000 | ||
c. | 34,500 | 25,500 | ||
d. | 5000 | 20,500 | ||
e. | 4600 | 25,100 | ||
f. | 800 | 24,300 | ||
k. | 5100 | 29,400 | ||
l. | 1800 | 27,600 | ||
m. | 950 | 26,650 | ||
n | 608 | 26,042 | ||
o. | 6230 | 19,812 | ||
p. | 1800 | 18,012 | ||
q. | 750 | 17,262 |
Account no. 106 | ||||
Date | PR | Debit ($) | Credit($) | Balance($) |
g. | 4250 | 4,250 | ||
i. | 10200 | 14,450 | ||
k. | 5100 | 9,350 | ||
Prepaid insurance | Account no.108 | |||
Date | PR | Debit | Credit | Balance |
d. | 5000 | 5000 |
Office equipment | Account no. 163 | |||
Date | PR | Debit | Credit | Balance |
a. | 5750 | 5750 | ||
h | 950 | 6700 | ||
Computer equipment | Account no. 164 | |||
Date | PR | Debit | Credit | Balance |
a. | 30,000 | 30,000 | ||
f. | 4500 | 34,500 |
Building | Account no. 170 | |||
Date | PR | Debit | Credit | Balance |
c. | 34,500 | 34,500 | ||
land | Account no. 201 | |||
Date | PR | Debit | Credit | Balance |
c. | 22000 | 22,000 |
Account payable | Account no. 201 | |||
Date | PR | Debit | Credit | Balance |
h. | 950 | 950 | ||
j. | 580 | 1530 | ||
950 | 580 |
Note payable | Account no. 307 | |||
Date | PR | Debit | Credit | Balance |
a. | 17000 | 17,000 | ||
d. | 3700 | 20,700 |
Common stock | Account no. 307 | |||
Date | PR | Debit | Credit | Balance |
h. | 100,750 | 100,750 | ||
Dividend | Account no. 319 | |||
Date | PR | Debit | Credit | Balance |
o. | 6230 | 6230 |
Fees Earned | Account no. 402 | |||
Date | PR | Debit | Credit | Balance |
e. | 4600 | 4600 | ||
G | 4250 | 8850 |
Equipment rental | Account no. 172 | |||
Date | PR | Debit | Credit | Balance |
b. | 580 | 580 |
Wages Expense | Account no. 601 | |||
Date | PR | Debit | Credit | Balance |
l. | 1800 | 1800 | ||
p. | 1800 | 3600 | ||
Repair expense | Account no. 604 | |||
Date | PR | Debit | Credit | Balance |
n. | 608 | 608 |
Advertisement expense | Account no. 106 | |||
Date | PR | Debit | Credit | Balance |
q. | 750 | 750 |
3.
Introduction: Journal entry is a technique of booking and recording financial transactions on any company. Ledger is used to record all economic transactions of the account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.
To prepare: Trail balance.
3.
Answer to Problem 2PSB
Total of trail balance is $141,080.
Explanation of Solution
NTrail balance | ||
Particular | Dr. | Cr. |
Cash | 17,262 | |
Account receivable | 9,350 | |
Prepaid insurance | 5,000 | |
Office equipment | 6,700 | |
Computer equipment | 34,500 | |
Building | 34,500 | |
Land | 22,000 | |
Account payable | 580 | |
Notes payable | 20,700 | |
Common stock | 100,750 | |
Dividends | 6230 | |
Fees earned | 19,050 | |
Equipment on rental | 580 | |
Wages Expense | 3600 | |
repair expense | 608 | |
Advertisement Expense | 750 | |
Total | 141,080 | 141,080 |
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Chapter 2 Solutions
Connect Access Card for Financial Accounting: Information and Decisions
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