Question

July	1	Paid employee salaries, $3000 for June. Felix pays his employees’ accrued salaries on the first day of each calendar month.
	8	Invoiced customers for consultancy services performed, $8750.
	14	Received $2250 cash from customers on account.
	15	Performed $750 of services for customers who paid in advance in June for consultancy services to be performed in July.
	25	Felix redrew capital of $1250.
	31	Paid $1750 for a one-year insurance policy.

a)     Journalise the transactions, including narrations.

b)    Prepare an unadjusted trial balance as at 31 July 2019.

Answer 1

a) Journal Entries
Date	Account Titles and Explanation	Debit	Credit
Jul. 1	Salaries Expense	$3,000
	Cash		$3,000
	(To record the payment of salaries by cash)
Jul. 8	Accounts Receivable	$8,750
	Service Revenue		$8,750
	(To record the services provided on account)
Jul. 14	Cash	$2,250
	Accounts Receivable		$2,250
	(To record the receipt of cash from customers on account)
Jul. 15	Unearned Service Revenue	$750
	Service Revenue		$750
	(To record the services provided for the amount taken as advance)
Jul. 25	Drawings	$1,250
	Capital - Felix		$1,250
	(To record the drawings )
Jul. 31	Prepaid Insurance	$1,750
	Cash		$1,750
	(To record the prepayment of one year insurance)
	b) Unadjusted Trial Balance
	Accounts	Debit	Credit
	Cash ($2,250 - ($3,000 + $1,750)		$2,500
	Accounts Receivable ($8.750 - $2,250)	$6,500
	Prepaid Insurance	$1,750
	Salaries Expense	$3,000
	Service Revenue		$8,750
	Drawings	$1,250
	Capital - Felix		$1,250
	Unearned Service Revemue
	Totals	$12,500	$12,500