Question

On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month: Jan. 1 Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $40,000. 2 Paid rent on office and equipment for the month, $6,000. 3 Purchased supplies on account, $3,200. 4 Paid creditor on account, $1,750. 5 Earned fees, receiving cash, $18,250. 6 Paid automobile expenses (including rental charge) for month, $1,880, and miscellaneous expenses, $420. 7 Paid office salaries, $5,000. 8 Determined that the cost of supplies used was $1,400. 9 Withdrew cash for personal use, $2,000. Required: 1. Journalize entries for transactions Jan. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles. 2. Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of January 31, 2019. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for January. 5. Determine the increase or decrease in owner’s equity for January.

Answer 1

1.

Date	General Journal	Debit	Credit
Jan. 1	Cash	40000
	Sharon Matthews, capital		4000
	(To record capital invested)
2	Rent expense	6000
	Cash		6000
	(To record rent paid)
3	Supplies	3200
	Accounts payable		3200
	(To record supplies purchased on account)
4	Accounts payable	1750
	Cash		1750
	(To record payment on account)
5	Cash	18250
	Fees revenue		18250
	(To record fees earned in cash)
6	Automobile expense	1880
	Miscellaneous expense	420
	Cash		2300
	(To record expenses paid in cash)
7	Salaries expense	5000
	Cash		5000
	(To record office salaries paid)
8	Supplies expense	1400
	Supplies		1400
	(To record supplies used)
9	Sharon Matthews, withdrawals	2000
	Cash		2000
	(To record withdrawals)

Note: Kindly re-confirm exact wording of account titles per the chart of accounts since the same has not been provided with the question.

2.

Cash					Supplies
Jan. 1	40000	Jan. 2	6000		Jan. 3	3200	Jan. 8	1400
Jan. 5	18250	Jan. 4	1750
		Jan. 6	2300		End. Bal.	1800
		Jan. 7	5000
		Jan. 9	2000
End. Bal.	41200
Accounts Payable					Sharon Matthews, Capital
Jan. 4	1750	Jan. 3	3200				Jan. 1	40000
		End. Bal.	1450
Sharon Matthews, Withdrawals					Fees Revenue
Jan. 9	2000						Jan. 5	18250
Rent Expense					Automobile Expense
Jan. 2	6000				Jan. 6	1880
Miscellaneous Expense					Salaries Expense
Jan. 6	420				Jan. 7	5000
Supplies Expense
Jan. 8	1400

3.

Tri-City Realty
Unadjusted Trial Balance
January 31, 2019
Account	Debit	Credit
Cash	41200
Supplies	1800
Accounts payable		1450
Sharon Matthews, capital		40000
Sharon Matthews, withdrawals	2000
Fees revenue		18250
Rent expense	6000
Automobile expense	1880
Miscellaneous expense	420
Salaries expense	5000
Supplies expense	1400
Total $	59700	59700

4a. Total revenue: $18250

b. Total expenses: $14700

c. Net income for January: $18250 - $14700 = $3550