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Chapter 2: 24E_1 (page 97)

Question:Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance The following transactions occurred during the month for Teresa Parker, CPA:

Jun. 1 Parker opened an accounting firm by contributing \(13,200 cash and office furniture with a fair market value of \)5,300 in exchange for common stock.

5 Paid monthly rent of \(1,300.

9 Purchased office supplies on account, \)600.

14 Paid employee’s salary, \(1,900.

18 Received a bill for utilities to be paid next month, \)370.

21 Paid \(500 of the accounts payable created on June 9.

25 Performed accounting services on account, \)5,700.

28 Paid cash dividends of $6,700

Requirements 1. Open the following four-column accounts of Teresa Parker, CPA: Cash, 110; Accounts Receivable, 120; Office Supplies, 130; Office Furniture, 140; Accounts Payable, 210; Utilities Payable, 220; Common Stock, 310; Dividends, 320; Service Revenue, 410; Salaries Expense, 510; Rent Expense, 520; and Utilities Expense, 530.

Short Answer

Expert verified

T-account are opened in step 2.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of Common Stock

The common stock is defined as the financial instrument which represents the ownership of the company

02

Opening of Accounts

Cash Account Number - 110

Balance

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Accounts Receivables Account Number - 120

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Office Supplies Account Number - 130

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Office Furniture Account Number - 140

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Accounts Payable Account Number - 210

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Utilities Payable Account Number - 220

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Common Stock Account Number - 310

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DividendsAccount Number - 320

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Service Revenue Account Number - 410

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Salaries Expense Account Number - 510

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Rent Expense Account Number - 520

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Utilities Expense Account Number - 530

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Most popular questions from this chapter

Question:Preparing financial statements from the trial balance and calculating the debt ratio

Preparing financial statements from the trial balance and calculating the debt ratio

Account Title Debit Credit

Office Supplies 1,400

Cash 32,000

Accounts Receivable 9,100

Prepaid Insurance 2,600

Equipment 24,000

Accounts Payable 3,400

Unearned Revenue 1,296

Notes Payable 34,000

Common Stock 20,000

Dividends 3,000

Salaries Expense 1,600

Rent Expense 700

Utilities Expense 100

Service Revenue 15,804

Total Balance \( 74,500 \) 74,500

Requirements 2. Prepare the statement of retained earnings for the month ended July 31, 2018. The beginning balance of retained earnings was $0.

Journalizing transactions and posting to T-accounts

Roland Foster Optical Dispensary completed the following transactions during the latter part of March:

Mar. 15 Purchased office supplies on account, \(3,400.

28 Paid \)1,800 on account.

Requirements ,

2. Open the following accounts (use T-account format): Cash (Beginning Balance of $21,000), Office Supplies, and Accounts Payable. Post the journal entries from Requirement 1 to the accounts, and compute the balance in each account.

What is the calculation for the debt ratio? Explain what the debt ratio evaluates.

What is the purpose of the chart of accounts? Explain the numbering typically associated with the accounts.

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

Vince York practices medicine under the business title Vince York, M.D. During July, the medical practice completed the following transactions:

Jul. 1 York contributed \(63,000 cash to the business in exchange for common stock.

5 Paid monthly rent on medical equipment, \)510.

9 Paid \(23,000 cash to purchase land to be used in operations.

10 Purchased office supplies on account, \)1,600.

19 Borrowed \(22,000 from the bank for business use.

22 Paid \)1,100 on account.

28 The business received a bill for advertising in the daily newspaper to be paid in August, \(240.

31 Revenues earned during the month included \)6,400 cash and \(6,000 on account.

31 Paid employees’ salaries \)2,200, office rent \(1,900, and utilities \)560. Record as a compound entry.

31 The business received \(1,120 for medical screening services to be performed next month.

31 Paid cash dividends of \)7,200.

The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense.

Requirements 1. Journalize each transaction. Explanations are not required
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