Question

Take the following transactions through the accounting cycle. The problem covers the month of January only. You should do the following:

1/1 Bill Jones started a new business called Bill’s Landscaping Service. Inc. The company issued 300,000 shares of common stock, par $1, for $300,000. The $300,000 was deposited in a bank account.

1/1 Purchased a truck for $40,000, no salvage value, useful life 5 years, for cash. 1/2 Purchased a 3 year insurance policy for $7,200 cash. 1/3 Purchased land $10,000; paid $ 8,000 down, gave a non-interest bearing note payable for the balance

1/15 Signed a contract to perform landscaping for $48,000. The job will take 2 months and we are paid at the beginning of the job. We begin work on the job immediately.

1/15 Signed a contract to perform landscaping for $40,000. The job will take 2 ½ months and we are paid at the end of the job. We begin work on the job immediately.

1/15 Purchased a computer for $ 4,800 cash, no salvage value, life 4 years.

1/20 Purchased office supplies for $ 2,000 on account

Additional Information: On 1/31, owed $800 wages and office supplies on hand totaled $ 1,500. Prepare a trial balance.

Question: Prepare a trial balance.

Answer 1

	Journal Entries
	Date	Transactions	Debit	Credit
	1-Jan	Cash	$300,000
		To Common Stock		$300,000
	1-Jan	Truck	$40,000
		To Cash		$40,000
	2-Jan	Prepaid Insurance	$7,200
		To Cash		$7,200
	3-Jan	Land	$10,000
		To Cash		$8,000
		To Notes Payable		$2,000
	15-Jan	Cash	$48,000
		To Unearned Revenue		$48,000
	15-Jan	No Entry
	15-Jan	Computer	$4,800
		To Cash		$4,800
	20-Jan	Office Supplies	$2,000
		To Accounts Payable		$2,000
	31-Jan	Wages Expense	$800
		To Wages Payable		$800
	31-Jan	Office Supplies Expense	$500
		To Office Supplies		$500
	31-Jan	Depreciation - Truck	8000
		To Accumulated Depreciation - Truck		8000
		(40000/5)
	31-Jan	Depreciation - Computer	1200
		To Accumulated Depreciation - Computer		1200
		(4800/4)
	31-Jan	Insurance Expense	2400
		To Prepaid Insurance		2400
		(7200/3)
	Bill's Landscaping Services Inc
	Trial Balance
	As on 31st January
	Accounts		Debit	Credit
	Cash		$288,000
	Truck		$40,000
	Prepaid Insurance		4800
	Land		$10,000
	Computer		$4,800
	Office Supplies		$1,500
	Common Stock			$300,000
	Unearned Revenue			$48,000
	Accumulated Depreciation - Truck			$8,000
	Accumulated Depreciation - Computer			$1,200
	Notes Payable			$2,000
	Accounts Payable			$2,000
	Depreciation Expense		9200
	Insurance Expense		2400
	Office Supplies Expense		$500
	Wages Expense		$800
	Wages Expense Payable			$800
			$362,000	$362,000