Question

You have “volunteered” as an unpaid intern to keep the books for my company that sells hotdogs at the beach. I established the business on September 1 and officially started selling hotdogs 3 days later.

Below are the transactions for September.

September 1                 The owner contributed $20,000 to the business to start the operations.

September 2                 Purchased a fully equipped hotdog cart for $15,000. Paid $5,000 upfront and put the remainder of the balance on account.

September 3                 Purchased hotdogs, sodas and consumable supplies for $500.

September 3                 Purchased 3 months of advertising services from the HB Times newspaper for $300.

September 4                 Sold $200 worth of hot dogs to customers for cash.

September 5                 Sold $300 worth of hot dogs to customers for cash.

September 6                 Sold $100 worth of hotdogs the HBPD on account.

September 8                 The HB surfing contest company asked me to supply hotdogs for their contests and paid $600 in advance for a total of 6 contests.

September 9                 Hired a person to help with the surf contest sales. Paid that person $100 for services performed.

September 10               Purchased hotdogs, sodas and consumable supplies for $500.

September 12               Sold $200 worth of hot dogs to customers for cash.

September 18               The city of HB requested that you provide $500 worth of food for an event they are holding at the pier this coming weekend. The job was completed. The city of HB paid $200 and you billed the difference.

September 25               HBPD paid the balance on account due from September 6.

September 26               Received propane (utility) bill, $100, which was put on account.

September 30               Took out a small business loan from the bank for $15,000 to expand the business. The bank approved the loan due one year from today.

September 30               The owner withdrew $200 in the form of dividends.

Adjustments

1. Expired advertising.
2. Provided hotdogs for 3 surfing contests
3. Depreciation of hotdog cart, $300.

Instructions

1. Journalize all September transactions in the general journal. You may skip journal entry descriptions.
2. Post every journal entry recorded in #1 above to the general ledger. The first transaction on September 1 has been journalized in the general journal and posted to the general ledger as an example.

Answer 1

Journal Entries
Date	Account	Debit	Credit
Sep 1st	Cash	20,000.00
	Common Stock		20,000.00
Sep 2nd	Hot Dog Cart	15,000.00
	Cash		5,000.00
	Accounts Payable		10,000.00
Sep 3rd	Consumables	500.00
	Cash		500.00
Sep 3rd	Prepaid Advertising	300.00
	Cash		300.00
Sep 4th	Cash	200.00
	Sales		200.00
Sep 5th	Cash	300.00
	Sales		300.00
Sep 6th	Accounts Receivable	100.00
	Sales		100.00
Sep 8th	Cash	600.00
	Advance from Customer		600.00
Sep 9th	Wages	100.00
	Cash		100.00
Sep 10th	Consumables	500.00
	Cash		500.00
Sep 12th	Cash	200.00
	Sales		200.00
Sep 18th	Cash	200.00
	Accounts Receivable	300.00
	Sales		500.00
Sep 25th	Cash	300.00
	Accounts Receivable		300.00
Sep 26th	Utility	100.00
	Utility Payable		100.00
Sep 30th	Cash	15,000.00
	Loan		15,000.00
Sep 30th	Dividends	200.00
	Cash		200.00
	Adjustment Entries
Sep 30th	Advertising Expense	100.00
	Prepaid Advertising		100.00
Sep 30th	Advance from Customer	300.00
	Sales		300.00
Sep 30th	Depreciation Expense	300.00
	Accumulated Depreciation		300.00
		54,600.00	54,600.00

Cash
Date	Account	Debit	Date	Account	Credit
Sep 1st	Common Stock	20,000.00	Sep 2nd	Hot Dog Cart	5,000.00
Sep 4th	Sales	200.00	Sep 3rd	Consumables	500.00
Sep 5th	Sales	300.00	Sep 3rd	Prepaid Advertising	300.00
Sep 8th	Advance from Customer	600.00	Sep 9th	Wages	100.00
Sep 12th	Sales	200.00	Sep 10th	Consumables	500.00
Sep 18th	Sales	200.00	Sep 30th	Dividends	200.00
Sep 25th	Accounts Receivable	300.00
Sep 30th	Loan	15,000.00	Sep 30th	Closing Balance	30,200.00
		36,800.00			36,800.00
Common Stock
Date	Account	Debit	Date	Account	Credit
Sep 30th	Closing Balance	20,000.00	Sep 1st	Cash	20,000.00
		20,000.00			20,000.00
Hot Dog Cart
Date	Account	Debit	Date	Account	Credit
Sep 2nd	Cash	5,000.00	Sep 30th	Closing Balance	15,000.00
Sep 2nd	Accounts Payable	10,000.00
		15,000.00			15,000.00
Accounts Payable
Date	Account	Debit	Date	Account	Credit
Sep 30th	Closing Balance	10,000.00	Sep 2nd	Hot Dog Cart	10,000.00
		10,000.00			10,000.00
Consumables
Date	Account	Debit	Date	Account	Credit
Sep 3rd	Cash	500.00	Sep 30th	Closing Balance	500.00
Sep 10th	Cash	500.00
		500.00			500.00
Sales
Date	Account	Debit	Date	Account	Credit
Sep 30th	Closing Balance	1,600.00	Sep 4th	Cash	200.00
			Sep 5th	Cash	300.00
			Sep 6th	Accounts Receivable	100.00
			Sep 12th	Cash	200.00
			Sep 18th	Cash	200.00
			Sep 18th	Accounts Receivable	300.00
			Sep 30th	Advance from Customer	300.00
		1,600.00			1,600.00
Accounts Receivable
Date	Account	Debit	Date	Account	Credit
Sep 6th	Sales	100.00	Sep 25th	Cash	300.00
Sep 18th	Sales	300.00	Sep 30th	Closing Balance	100.00
		400.00			400.00
Advance from Customer
Date	Account	Debit	Date	Account	Credit
Sep 30th	Sales	300.00	Sep 8th	Cash	600.00
Sep 30th	Closing Balance	300.00
		600.00			600.00
Wages
Date	Account	Debit	Date	Account	Credit
Sep 9th	Wages	100.00	Sep 30th	Closing Balance	100.00
		100.00			100.00