Question

Peter loves dogs and cats. For the past several years, he has owned and operated Homeward Bound, which temporarily houses pets while their owners go on vacation. For the month of June, the company has the following transactions:

1. June 2 Obtain cash by borrowing $19,000 from the bank by signing a note.

2. June 3 Pay rent for the current month, $1,200.

3. June 7 Provide services to customers, $3,300 for cash and $1,600 on account.

4. June 11 Purchase cages and equipment necessary to maintain the animals, $6,500 cash.

5. June 17 Pay employees’ salaries for the first half of the month, $4,600.

6. June 22 Pay dividends to stockholders, $1,075.

7. June 25 Receive cash in advance from a customer who wants to house his two dogs (Chance and Shadow) and cat (Sassy) while he goes on vacation the month of July, $1,150.

8. June 28 Pay utilities for the month, $1,400.

9. June 30 Record salaries earned by employees for the second half of the month, $4,600. Payment will be made on July 2.

1. Record each transaction(journal entries)

2. determine the transactions involving cash.

3. Assuming the balance of cash at the beginning of June is $12,800, post each cash transaction to the cash T-account.

June 1	12,800
ending balance

Answer 1

1)	Record journal Entries
Date	Account Titles and Explanation	Debit	Credit
2-Jun	Cash	$19,000
	Note Payable		$19,000
	( To record the borrowing from notes payable from bank)
3-Jun	Rent Expense	$1,200
	Cash		$1,200
	( To record the payment of rent)
7-Jun	Cash	$3,300
	Accounts Receivable	$1,600
	Service Revenue		$4,900
	( To record the service revenue)
11-Jun	Equipment	$6,500
	Cash		$6,500
	(To record the purchase of cages and the equipment)
17-Jun	Salaries Expense	$4,600
	Cash		$4,600
	To record the payment of the salaries for half month
22-Jun	Dividends	$1,075
	Cash		$1,075
	( To record the payment of dividends
25-Jun	Cash	$1,150
	Unearned Service Revenue		$1,150
	( To record the receipt of advance from the customer)
28-Jun	Utilities Expense	$1,400
	Cash		$1,400
	( To record the payment of the utilities expense)
30-Jun	Salaries Expense	$4,600
	Salaries Payable		$4,600
	(To record the accrual of salaries)
2) Determination of transactions involving cash
2-Jun	Obtaining cash by borrowing a note	cash inflow
3-Jun	payment of rent	cash outflow
7-Jun	receipts from customer	cash inflow
11-Jun	Equipment and cage purchases by paying cash	cash outflow
17-Jun	payment of salaries for half month	cash outflow
22-Jun	Payment of dividend	cash outflow
25-Jun	receipt of advance from the customer	cash inflow
28-Jun	Payment of Utilities	cash outflow
3)	Cash Account
	Debit				Credit
	Description	Amount	Date	Description	Amount
	Beginning Balance	$12,800	3-Jun	Rent Expense	$1,200
	Note Payable	$19,000	11-Jun	Equipment	$6,500
	Service Revenue	$3,300	17-Jun	Salaries Expense	$4,600
	Unearned Revenue	$1,150	22-Jun	Dividends	$1,075
			28-Jun	Utilities Expense	$1,400
			30-Jun	Ending Balance	$21,475
	Totals	$36,250			$36,250
	Ending Balance	$21,475