Question

The company has the following account balances on June 1, 2020. (all accounts have their ‘normal’ balances)

Drawings: 1000

Cash: 20000

Service revenue: 50000

Capital: 15000

Depreciation Expense: 700

Equipment: 30000

Accounts Payable: 5000

Insurance Expense: 500

Unearned Service Revenue: 4000

Prepaid Service Revenue: 500

Accounts Receivable: 4000

Rent Expense: 5000

Salaries Expense: 16000

Accumulated Depreciation - Equipment: 3000

During June 2018, the following events took place. Where appropriate, record a journal entry for each transaction. If no journal entry is required, write ‘no entry’.

1. On June 2, the company prepaid rent for July to September for $6,000.
2. On June 8, someone invested $3,000 cash and a computer system valued at $2,000 into the company.
3. On June 10, the company collected $4,000 it was owed on account.
4. On June 15, The company provided a quotation for membership fees to a corporation looking to provide fitness benefits to its employees. The quotation was for $10,000. The corporation will decide next month if it is a good fit.
5. On June 22 the company provided product and collected $5,000.
6. On June 24 the company received a $1,000 bill for advertising expense that it will pay in the near future.
7. On June 27 the company paid $2,000 cash on account.
8. On June 29, the owner withdrew $600 for personal use.
9. On June 30, the company purchased $1,000 of supplies on account.
10. On June 30, the company paid employee salaries of $3,000.

Prepare the unadjusted trial balance for the company at June 31, 2018.

Answer 1

Date	Particulars	Debit	Credit
June 2	Prepaid Rent a/c	6000
	Cash a/c		6000
June 8	Cash a/c	3000
	Computer system a/c	2000
	Capital a/c		5000
June 10	Cash a/c	4000
	Accounts Receivable a/c		4000
June 15	"No Entry"
June 22	Cash a/c	5000
	Product Revenue a/c		5000
June 24	Advertisment Expense a/c	1000
	Accounts Payable a/c		1000
June 27	Accounts Payable a/c	2000
	Cash a/c		2000
June 29	Drawings a/c	600
	Cash a/c		600
June 30	Purchase of Supplies a/c	1000
	Accounts Payable a/c		1000
June 30	Salaries a/c	3000
	Cash a/c		3000

Unadjusted trial balance

for the company at June 31, 2018

Accounts	Debit	Credit
Drawings	1600
Cash	20400
Service Revenue		50000
Capital		20000
Depreciation	700
Equipment	30000
Accounts Payable		5000
Insurance Expense	500
Unearned Service Revenue		4000
Prepaid Service Revenue	500
Account Receivable	0
Rent Expense	5000
Salaries Expense	19000
Accumulated Depreciation-Equipment		3700
Prepaid Rent	6000
Computer System	2000
Product Revenue		5000
Advertisement Expense	1000
Purchase of Supplies	1000
Total	87700	87700