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Chapter 2: 19E_1 (page 95)

Question: The following transactions occurred for Wilke Technology Solutions:

May 1 The business received cash of \(105,000 and issued common stock to Zoe Wilke.

2 Purchased office supplies on account, \)550.

4 Paid \(57,000 cash for building and land. The building had a fair market value of \)45,000.

6 Performed services for customers and received cash, \(3,600.

9 Paid \)350 on accounts payable.

17 Performed services for customers on account, \(3,500.

19 Paid rent expense for the month, \)1,200.

20 Received \(1,500 from customers for services to be performed next month.

21 Paid \)900 for advertising in next month’s IT Technology magazine.

23 Received \(3,100 cash on account from a customer.

31 Incurred and paid salaries, \)1,700

Posting journal entries to four-column accounts

Requirements 1. Open four-column accounts using the following account numbers: Cash, 110; Accounts Receivable, 120; Office Supplies, 130; Prepaid Advertising, 140; Land, 150; Building, 160; Accounts Payable, 210; Unearned Revenue, 220; Common Stock, 310; Service Revenue, 410; Rent Expense, 510; and Salaries Expense, 520.

Short Answer

Expert verified

Accounts receivables are the amount owed to the business and required accounts are opened in step 2.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of Accounts Receivables

Accounts receivables are defined as the balance sheet item which represents the amount owed to the business by the clients or customers

02

Opening of Accounts

Cash Account Number - 110

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Accounts Receivables Account Number - 120

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Office Supplies Account Number - 130

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Prepaid Advertising Account Number - 140

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Land Account Number - 150

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Building Account Number - 160

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Accounts Payable Account Number - 210

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Unearned Revenue Account Number - 220

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Common Stock Account Number - 310

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Service Revenue Account Number - 410

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Rent Expense Account Number - 510

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

Salaries Expense Account Number - 520

Balance

Date

Item

PR

Debit

Credit

Debit

Credit

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Most popular questions from this chapter

What are source documents? Provide examples of source documents that a business might use

In 35 words or fewer, explain the difference between a debit and a credit, and explain what the normal balance of the six account types is.

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

Theodore McMahon opened a law office on April 1, 2018. During the first month of operations, the business completed the following transactions:

Apr. 1 McMahon contributed \(70,000 cash to the business, Theodore McMahon, Attorney. The business issued common stock to McMahon.

3 Purchased office supplies, \)1,100, and furniture, \(1,300, on account.

4 Performed legal services for a client and received \)2,000 cash.

7 Purchased a building with a market value of \(150,000, and land with a market value of \)30,000. The business paid \(40,000 cash and signed a note payable to the bank for the remaining amount.

11 Prepared legal documents for a client on account, \)400.

15 Paid assistant’s semimonthly salary, \(1,200.

16 Paid for the office supplies purchased on April 3 on account. 18 Received \)2,700 cash for helping a client sell real estate.

19 Defended a client in court and billed the client for \(1,700.

25 Received a bill for utilities, \)650. The bill will be paid next month.

28 Received cash on account, \(1,100.

29 Paid \)3,600 cash for a 12-month insurance policy starting on May 1.

29 Paid assistant’s semimonthly salary, \(1,200.

30 Paid monthly rent expense, \)2,100.

30 Paid cash dividends of $3,200.

Requirements 1. Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Building; Furniture; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.

Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance

Ann Simpson started her practice as a design consultant on September 1, 2018. During the first month of operations, the business completed the following transactions:

Sep. 1 Received \(48,000 cash and issued common stock to Simpson.

4 Purchased office supplies, \)1,200, and furniture, \(1,300, on account.

6 Performed services for a law firm and received \)1,900 cash.

7 Paid \(18,000 cash to acquire land to be used in operations.

10 Performed services for a hotel and received its promise to pay the \)1,200 within one week.

14 Paid for the furniture purchased on September 4 on account.

15 Paid assistant’s semimonthly salary, \(1,500.

17 Received cash on account, \)1,000.

20 Prepared a design for a school on account, \(650.

25 Received \)2,100 cash for design services to be performed in October.

28 Received \(2,900 cash for consulting with Plummer & Gordon.

29 Paid \)600 cash for a 12-month insurance policy starting on October 1.

30 Paid assistant’s semimonthly salary, \(1,500.

30 Paid monthly rent expense, \)600.

30 Received a bill for utilities, \(350. The bill will be paid next month.

30 Paid cash dividends of \)3,700.

Requirements 3. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal

Calculating the balance of a T-account

Accounts Payable

May 2 6,000 21,000 May 1

May 22 11,500 500 May 5

8,500 May 15

500 May 23

Calculate the Accounts Payable balance.
See all solutions

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