Question

Problem 15

Jack Wicks is the owner and manager of the Rodeside Motel, which caters to family travelers. He has hired you to do his bookkeeping. The following transactions occurred in August:

            a.     Cash of $1,000 was paid on August 15 for September’s rent.

            b.     Cash room sales of $15,000.

             c.     Room sales on account, $250.

            d.     Purchase of cleaning supplies for cash, $290.

            e.     Purchase of office supplies on account from Bing’s Office Supply Hut, $150.

             f.     New investment by owner of $1,000.

            g.     Payment on account (Bing’s), $50.

            h.     Rental income from vending machines, $75.

             i.     Payment of wages with cash, $5,700.

Further, he has account balances for the beginning of August as follows:

Cash                                                                        $   3,120

Accounts Receivable                                                    200

Cleaning Supplies                                                          30

Office Supplies                                                              100

Accounts Payable, Bing’s Office Supply Hut             50

Notes Payable                                                               400

Jack Wicks, Capital                                                   3,000

Required:

            1.     Enter the transactions into the general journal, showing debits and credits, and an explanation for each.

            2.     Open T–accounts for each balance sheet account as well as for the revenue and expense accounts. Enter the beginning balances.

            3.     Post the August transactions to the T–accounts. Determine the ending balance for each account.

            4.     Prepare a trial balance for August 31, 20X3.

Answer 1

Answer:

	General Journal	Debit ($)	Credit ($)
a.	Prepaid rent	1,000
	Cash		1,000
	(to reord prepaid rent)
b.	Cash	15,000
	Sales evenue		15,000
	(to record sales revenue for cash)
c.	Account receivable	250
	Sales evenue		250
	(to record sales revenue on account)
d.	Cleaning Supplies	290
	Cash		290
	(to record purchase of cleaning supplies for cash)
e.	Office Supplies	150
	Account payable, Bing's Office Supply Hut		150
	(to record purchase of office supplies on account)
f.	Cash	1,000
	Jack Wicks, Capital		1,000
	(to record owner's investment)
g.	Account payable, Bing's Office Supply Hut	50
	Cash		50
	(to record payment on aaccount)
h.	Account receivable	75
	Rent revenue		75
	(to record rent revenue on account)
i.	Wages expense	5700
	Cash		5700
	(to record wages expense)
	Trial Balance
	For the Month Ended August31, 20X3
	Account Name	Debit ($)	Credit ($)
	Cash	12,080
	Account Payable, Bing's Office Supply Hut		150
	Jack Wicks, Capital		4,000
	Office Supplies	250
	Cleaning Supplies	320
	Rent revenue		75
	Account receivable	525
	Sales revenue		15,250
	Wages expense	5,700
	Prepaid rent	1,000
	Notes payable		400
	Totals	19,875	19,875