Concept explainers
1.
Introduction: A journal is used to record financial transactions. It shows debits and credits of each transaction. The process of recording transactions is called journalizing. After journalizing, the transactions are
The
1.
Explanation of Solution
- Journal entries to record the transactions in the month of June
S.no | Account title and Explanation | PR | Debit | Credit |
a. | Cash | 101 | $100,000 | |
Office equipment | 163 | $5,000 | ||
Drafting equipment | 164 | $60,000 | ||
J.A Capital | 301 | $165,000 | ||
Owners investment in business | ||||
b. | Land | 172 | $49,000 | |
Cash | 101 | $6,300 | ||
Notes payable | 250 | $42,700 | ||
Record purchase of land for cash and note payable | ||||
c. | Building | 170 | $55,000 | |
Cash | 101 | $55,000 | ||
Record purchase of building for cash | ||||
d. | Prepaid insurance | 108 | $3,000 | |
Cash | 101 | $3,000 | ||
Record payment of cash for 18 month insurance | ||||
e. | Cash | 101 | $6,200 | |
Engineering fees earned | 402 | $6,200 | ||
Record receipt of cash for plan completed | ||||
f. | Drafting equipment | 164 | $20,000 | |
Cash | 101 | $9,500 | ||
Notes payable | 250 | $10,500 | ||
Record purchase of drafting equipment for cash and note payable | ||||
g. | Accounts receivable | 106 | $14,000 | |
Engineering fees earned | 402 | $14,000 | ||
Record earnings of fees | ||||
h. | Office equipment | 163 | $1,150 | |
Accounts payable | 201 | $1,150 | ||
Record purchase of office equipment on credit | ||||
i. | Accounts receivable | 106 | $22,000 | |
Engineering fees earned | 402 | $22,000 | ||
Record earnings of fees | ||||
j. | Equipment rental expense | 602 | $1,333 | |
Accounts payable | 2o1 | $1,333 | ||
Record accrued rental equipment rent | ||||
k. | Cash | 101 | $7,000 | |
Accounts receivable | 106 | $7,000 | ||
Record receipt of cash on receivables | ||||
l. | Wage expense | 601 | $1,200 | |
Cash | 101 | $1,200 | ||
Record payment of wages to assistant | ||||
m. | Accounts payable | 201 | $1,150 | |
Cash | 101 | $1,150 | ||
Record payment of cash for accounts payable | ||||
n. | Repairs equipment | 604 | $925 | |
Cash | 101 | $925 | ||
Record payment of cash for repairs | ||||
o. | J.A withdrawals | 302 | $9,480 | |
Cash | 101 | $9,480 | ||
Record withdrawals by owner for personal use | ||||
P. | Wages expenses | 601 | $1,200 | |
Cash | 101 | $1,200 | ||
Record payment of cash for wages | ||||
q. | Advertising expense | 603 | $2,500 | |
Cash | 101 | $2,500 | ||
Record payment of cash for advertising |
2.
Introduction: A journal is used to record financial transactions. It shows debits and credits of each transaction. The process of recording transactions is called journalizing. After journalizing, the transactions are posted into ledgers.
The given ledger accounts
2.
Explanation of Solution
Posting of journal entries in ledgers
CashAccount no 101
Date | PR | Account title | Debit | Credit | Balance |
a. | A.N Capital | $100,000 | $100,000 | ||
b. | Land | $6,300 | $93,700 | ||
c. | Building | $55,000 | $38,700 | ||
d. | Prepaid insurance | $3,000 | $35,700 | ||
e. | Engineering fees earned | $6,200 | $41,900 | ||
f. | Drafting equipment | $9,500 | $32,400 | ||
k. | Accounts receivable | $7,000 | $39,400 | ||
l. | Wages expenses | $1,200 | $38,200 | ||
m. | Accounts payable | $1,150 | $37,050 | ||
n. | Repairs expenses | $925 | $36,125 | ||
o. | J.A withdrawals | $9,480 | $26,645 | ||
p. | Wages expense | $1,200 | $25,445 | ||
q. | Advertising expense | $2,500 | $22,945 |
Accounts receivableAccount no 106
Date | PR | Account title | Debit | Credit | Balance |
g. | Engineering fees earned | $14,000 | $14,000 | ||
i. | Engineering fees earned | $22,000 | $36,000 | ||
k. | Cash | $7,000 | $29,000 |
Prepaid insuranceAccount no 108
Date | PR | Account title | Debit | Credit | Balance |
d. | Cash | $3,000 | $3,000 |
Drafting equipmentAccount no 164
Date | PR | Account title | Debit | Credit | Balance |
a. | J.A Capital | $60,000 | $60,000 | ||
f. | Cash | $9,500 | $69,500 | ||
Notes payable | $10,500 | $80,000 |
BuildingAccount no 170
Date | PR | Account title | Debit | Credit | Balance |
c. | Cash | $55,000 | $55,000 |
LandAccount no 172
Date | PR | Account title | Debit | Credit | Balance |
b. | Cash | $6,300 | $6,300 | ||
Notes payable | $42,700 | $49,000 |
Office equipmentAccount no 163
Date | PR | Account title | Debit | Credit | Balance |
a. | J.A Capital | $5,000 | $5,000 | ||
h. | Accounts payable | $1,150 | $6,150 |
Accounts PayableAccount no 201
Date | PR | Account title | Debit | Credit | Balance |
h. | Office equipment | $1,150 | $1,150 | ||
j. | Rental equipment expense | $1,333 | $2,483 | ||
m. | Cash | $1,150 | $1,333 |
Notes payableAccount no 250
Date | PR | Account title | Debit | Credit | Balance |
b. | Land | $42,700 | $42,700 | ||
f. | Drafting equipment | $10,500 | $53,200 |
J.A CapitalAccount no 301
Date | PR | Account title | Debit | Credit | Balance |
a. | Cash | $100,000 | $100,000 | ||
Office equipment | $5,000 | $105,000 | |||
d. | Drafting equipment | $60,000 | $165,000 |
J.A WithdrawalsAccount no 302
Date | PR | Account title | Debit | Credit | Balance |
o. | Cash | $9,480 | $9,480 |
Engineering Fees earnedAccount no 402
Date | PR | Account title | Debit | Credit | Balance |
e. | Cash | $6,200 | $6,200 | ||
g. | Accounts receivable | $14,000 | $20,200 | ||
I, | Accounts receivable | $22,000 | $42,200 |
Wages expenseAccount no 601
Date | PR | Account title | Debit | Credit | Balance |
l. | Cash | $1,200 | $1,200 | ||
p. | Cash | $1,200 | $2,400 |
Equipment rental expensesAccount no 602
Date | PR | Account title | Debit | Credit | Balance |
j. | Accounts payable | $1,333 | $1,333 |
Advertising expensesAccount no 603
Date | PR | Account title | Debit | Credit | Balance |
q. | Cash | $2,500 | $2,500 |
Repair expensesAccount no 604
Date | PR | Account title | Debit | Credit | Balance |
n. | Cash | $925 | $925 |
3.
Introduction: A journal is used to record financial transactions. It shows debits and credits of each transaction. The process of recording transactions is called journalizing. After journalizing, the transactions are posted into ledgers.
The
3.
Answer to Problem 5GLP
Trial balance total $261,733
Explanation of Solution
Trial balance
Account title | Debit | Credit |
Cash | $22,945 | |
Accounts receivable | $29,000 | |
Prepaid insurance | $3,000 | |
Drafting equipment | $80,000 | |
Office equipment | $6,150 | |
Land | $49,000 | |
Building | $55,000 | |
Accounts payable | $1,333 | |
Note payable | $53,200 | |
J.A Capital | $165,000 | |
J.A Withdrawals | $9,480 | |
Engineering fees earned | $42,200 | |
wages expense | $2,400 | |
Equipment rental expense | $1,333 | |
Advertising expense | $2,500 | |
Repair expenses | $925 | |
Total | $261,733 | $261,733 |
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Chapter 2 Solutions
FINANCIAL ACCT.FUND.(LOOSELEAF)
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