Question

I) Journalize each of he following transactions: Assume the following account numbers: Cash: 101; Accounts Receivable: 102; Equipment: 110; Accounts Payable: 201; Landscaping Fees: 401; Advertising Expense: 510; Utility Expense: 512
1) Paid electric bill, $200
2) Paid $300 for advertising
3) Earned $1000 for landscaping services - the customer makes a $200 balance and finances the balance
4) Refer to #3 - customer makes a $400 payment.
5) Refer to #3 and #4 - customer pays balance owed
6) Purchased equipment for $2000 - you make a $1000 payment and finance the balance
7) Refer to #6. You make a $400 payment.
8) Refer to # 6 and #7 - you pay off the balance.
II) Based on the data below, complete an Income Statement, Statement of Owner's Equity, and Balance Sheet:
Cash = $13,500
Accounts Receivable = $12,000
Supplies = $1500
Equipment = $10,500
Drawing = $1500
Rent Expense = $3000
Wage Expense = $1500
Advertising Expense = $1350
Telephone Expense = $150
Service Fees = $24000
Accounts Payable = $3000
Capital = $18,000
III) Journalize the adjusting entries for each of the following:
1) Supplies, beginning = $840
Supplies, ending = $40
Required: Make the supplies adjustment
2) Prepaid Insurance, beginning = $2000
Prepaid Insurance, ending = $1500
Required: Make the adjustment for prepaid insurance
3) Purchased equipment for $10,000 on 1-1-20
Depreciation Rate = 5%
Required: Make the adjustment for depreciation of the equipment
4) Unpaid wages as of 12-31-2020 were $5000.Make the adjustment for accrued wages

Answer 1

Prepare journal entries as follows:

Trn.	Account Titles and Explanation	Debit	Credit
1)	Utility Expense	$200
	Cash		$200
	(To record utility expense)
2)	Advertising Expense	$300
	Cash		$300
	(To record utility expense)
3)	Cash	$200
	Accounts Receivable	$800
	Landscaping fees		$1,000
	(To record landscaping fees)
4)	Cash	$400
	Accounts Receivable		$400
	(To record cash from receivables)
5)	Cash [$800 - $400]	$400
	Accounts Receivable		$400
	(To record cash from receivables balance amount)
6)	Equipment	$2,000
	Cash		$1,000
	Accounts payable		$1,000
	(To record purchase of equipment)
7)	Accounts payable	$400
	Cash		$400
	(To record payments)
8)	Accounts payable [$1000 - $400]	$600
	Cash		$600
	(To record payments)

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Prepare Adjusting Entries as follows:

Trn.	Account Titles and Explanation	Debit	Credit
Adj. 1)	Supplies Expense	$2,300
	Supplies [$840 + $1500 - $40]		$2,300
	(To record supplies expense)
Adj. 2)	Insurance Expense	$500
	Prepaid Insurance [$2000 - $1500]		$500
	(To record insurance expense)
Adj. 3)	Depreciation Expense [$10000 × 5%]	$500
	Accumulated depreciation-equipment		$500
	(To record depreciation expense)
Adj. 4)	Wages Expense	$5,000
	Wages payable		$5,000
	(To record wages expense)

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Income Statement
Revenue:
Service Fees	$24,000
Landscaping fees	$1,000
Total		$25,000
Less: Expenses
Rent Expense	$3,000
Wages Expense [$1500 + $5000]	$6,500
Advertising Expense [$1350 + $300]	$1,650
Utility Expense	$200
Telephone Expense	$150
Supplies Expense	$2,300
Insurance Expense	$500
Depreciation Expense	$500	$14,800
Net Income		$10,200
Statement of owners' equity
Beg. Bal.	$18,000
Add: Net Income	$10,200
Less: Drawings	($1,500)
End. Bal.	$26,700