Question

Instructions Journalize the March transactions, including explanations. Friendley’s records golf fees as service revenue.

P3-5A Foyle Architects incorporated as licensed architects on April 1, 2014. During the first month of the operation of the business, these events and transactions occurred:

Apr. 1 Stockholders invested $18,000 cash in exchange for common stock of the corporation.

1 Hired a secretary-receptionist at a salary of $375 per week, payable monthly.

2 Paid offi ce rent for the month $900.

3 Purchased architectural supplies on account from Burlington Company $1,300.

10 Completed blueprints on a carport and billed client $1,900 for services.

11 Received $700 cash advance from J. Madison to design a new home.

20 Received $2,800 cash for services completed and delivered to M. Svetlana.

30 Paid secretary-receptionist for the month $1,500. 30 Paid $300 to Burlington Company for accounts payable due.

The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.

Instructions (

a) Journalize the transactions, including explanations.

(b) Post to the ledger T-accounts.

(c) Prepare a trial balance on April 30, 2014.

Answer 1

Solution

Foyle Architects

1. Journal Entries

Date	Account Titles and Explanation	Ref. No.	Debit	Credit
1-Apr-14	Cash		$18,000
	Common Stock			$18,000
	(To record issue of common stock)
2-Apr-14	Rent Expense		$900
	Cash			$900
	(being rent paid for the month of April)
3-Apr-14	Supplies		$1,300
	Accounts Payable			$1,300
	(Being supplies purchased on account)
10-Apr-14	Accounts Receivable		$1,900
	Service Revenue			$1,900
	(Being customers billed for services rendered)
11-Apr-14	Cash		$700
	Unearned Service Revenue			$700
	(Being advance received from customer)
20-Apr-14	Cash		$2,800
	Service Revenue			$2,800
	(Cash received for services)
30-Apr-14	Salaries and Wages Expense		$1,500
	Cash			$1,500
	(being wages paid)
30-Apr-14	Accounts Payable		$300
	Cash			$300
	(Being cash paid towards Accounts Payable)

1. T- Accounts

		Cash
Debit					Credit
Date	Description	Amount	Date	Description	Amount
1-Apr-14	Common Stock	$18,000	2-Apr-14	Rent Expense	$900
11 Apr, 14	Unearned Service Revenue	$700	30-Apr-14	Wages Expense	$1,500
20 Apr, 14	Service Revenue	$2,800	30-Apr-14	Accounts Payable	$300
			30-Apr-14	Ending Balance	$18,800
		$21,500			$21,500
		Common Stock
Debit					Credit
Date	Description	Amount	Date	Description	Amount
			1-Apr-14	Cash	$18,000
30-Apr-14	Ending Balance	$18,000
		$18,000			$18,000
		Service Revenue
Debit					Credit
Date	Description	Amount	Date	Description	Amount
			10-Apr-14	Accounts Receivable	$1,900
30-Apr-14	Ending Balance	$4,700	20-Apr-14	Cash	$2,800
		$4,700			$4,700
		Accounts Receivable
Debit					Credit
Date	Description	Amount	Date	Description	Amount
10-Apr-14	Service Revenue	$1,900	30-Apr-14	Ending Balance	$1,900
		$1,900			$1,900
		Unearned Service Revenue
Debit					Credit
Date	Description	Amount	Date	Description	Amount
			11-Apr-14	Cash	$700
30-Apr-14	Ending Balance	$700
		$700			$700
		Supplies
Debit					Credit
Date	Description	Amount	Date	Description	Amount
3-Apr-14	Accounts Payable	$1,300	30-Apr-14	Ending Balance	$1,300
		$1,300			$1,300
		Accounts Payable
Debit					Credit
Date	Description	Amount	Date	Description	Amount
30-Apr-14	Cash	$300	3-Apr-14	Supplies	$1,300
30-Apr-14	Ending Balance	$1,000
		$1,300			$1,300
		Salaries and Wages Expense
Debit					Credit
Date	Description	Amount	Date	Description	Amount
30-Apr-14	Cash	$1,500	30-Apr-14	Ending Balance	$1,500
		$1,500			$1,500
		Rent Expense
Debit					Credit
Date	Description	Amount	Date	Description	Amount
2-Apr-14	Cash	$900	30-Apr-14	Ending Balance	$900
		$900			$900

1. Trial Balance –

Foyle Architects
Trial Balance as on April 30, 2014
Account Titles	Debit	Credit
Cash	$18,800
Accounts Receivables	$1,900
Supplies	$1,300
Accounts Payable		$1,000
Unearned Service Revenue		$700
Service Revenue		$4,700
Common Stock		$18,000
Rent Expense	$900
Salaries and Wages Expense	$1,500
Totals	$24,400	$24,400