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Chapter 2: 29PGA_2 (page 101)

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 2. 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.

Short Answer

Expert verified

The T-accounts are shortened forms of ledgeraccounts and all the required t-Accounts are prepared in step 2.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of T-Account

The t-accounts are defined as the shortened form of the ledger account which is prepared to post the journal entries

02

Step 2:Preparing T-Accounts

Cash

Jul 1 $63,000

$510 Jul 5

Jul 18 $22,000

$23,000 Jul 9

Jul 31 $1,120

$1,100 Jul 22

Jul 31 $6,400

$7,200 Jul 31

$2,200 July 31

$1,900 Jul 31

$560 Jul 31

Bal. $56,050

Accounts Receivables

Jul 31 $6,000

Bal $6,000

Office Supplies

Jul 10 $1,600

Bal $1,600

Land

Jul 9 $23,000

Bal. $23,000

Accounts Payable

Jul 22 $1,100

$1,600 Jul 10

$500 Bal.

Advertising Payable

$240 Jul 28

$240 Bal.

Unearned Revenue

$1,120 Jul 31

$1,120 Bal.

Notes Payable

$22,000 Jul 19

$22,000 Bal.

Common Stock

$63,000 Jul 1

$63,000 Bal.

Dividends

Jul 31 $7,200``

Bal. $7,200

Service Revenue

$6,400 Jul 31

$6,000 July 31

12,400 Bal.

Salaries Expense

Jul 31 $2,200

Bal. $2,200

Rent Expense

Jul 5 $510

Jul 31 $1,900

Bal. 2,410

Utilities Expense

Jul 31 $560

Bal. $560

Advertising Expense

Jul 28 $240

Bal. $240

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Most popular questions from this chapter

Question:The accountant for Countryside Painting Specialists is having a hard time preparing the trial balance as of November 30, 2018:

Account Title Debit Credit

Accounts Receivable 1,300

PaintingEquipment 13,500

Cash 12,100

Advertising Expense 550

Dividends 3,500

Accounts Payable 3,300

Rent Expense 1,800

Common Stock 15,000

Service Revenue 15,600

Unearned Revenue 1,700

Salaries Expense 2,400

Office Supplies 200

Utilities Expense 250

Total 48,600 22,600

Prepare the corrected trial balance as of November 30, 2018. Assume all amounts are correct and all accounts have normal balances.

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 4. Prepare the trial balance of Ann Simpson, Designer, as of September 30, 2018.

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

Consider the following transactional data for the first month of operations for Crystal Clear Cleaning.

Nov. 1 Stockholders contributed \(15,000 and a truck, with a market value of \)3,000, to the business in exchange for common stock.

2 The business paid \(4,000 to Pleasant Properties for November through February rent. (Debit Prepaid Rent)

3 Paid \)4,800 for a business insurance policy for the term November 1, 2018 through October 31, 2019. (Debit Prepaid Insurance)

4 Purchased cleaning supplies on account, \(320.

5 Purchased on account an industrial vacuum cleaner costing \)1,500. The invoice is payable November 25.

7 Paid \(3,900 for a computer and printer.

9 Performed cleaning services on account in the amount of \)4,700.

10 Received \(200 for services rendered on November 9. 15 Paid employees, \)400.

16 Received \(15,000 for a 1-year contract beginning November

16 for cleaning services to be provided. Contract begins November 16, 2018, and ends November 15, 2019. (Credit Unearned Revenue)

17 Provided cleaning services and received \)400 cash.

18 Received a utility bill for \(175 with a due date of December 4, 2018. (Use Accounts Payable)

20 Borrowed \)36,000 from bank with interest rate of 6% per year.

21 Received \(500 on account for services performed on November 9.

25 Paid \)750 on account for vacuum cleaner purchased on November 5.

29 Paid \(200 for advertising.

30 Cash dividends of \)1,400 were paid to stockholders

3. Post the journal entries to the T-accounts, and calculate account balances

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 2. Open a T-account for each of the accounts.

Journalizing transactions John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January.

Jan. 1 The business received \(34,000 cash and issued common stock to Daniel.

2 Purchased medical supplies on account, \)17,000.

4 Performed services for patients receiving \(1,600.

12 Paid monthly office rent of \)3,000.

15 Recorded $7,000 revenue for services rendered to patients on account.

Journalize the transactions of John Daniel, M.D. Include an explanation with each entry.
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