Question

Transaction Entries, Posting, Trial Balance, and Adjusting Entries Huang Karate School began business on June 1. Transactions for June are as follows:

1	Po Huang contributed his personal funds in exchange for
	common stock to begin the business.	$11,500
2	Purchased equipment for a total of	6,750
	Paid cash of $1,150, with the balance due in 30 days.
3	Paid 6 months' rent.	7,452
4	Paid one-year premium on liability insurance.	876
5	Paid June newspaper advertising.	625
6	Billed participants for karate lessons to date.	6,200
7	Received from a local company funds to conduct 3 sessions.	1,455
	The 3 sessions will be June 29, July 6, and July 13, with a cost per session of	485
8	Collected on account from participants.	5,800
9	Paid to repair damage caused by an errant kick.	675
10	Billed participants for karate lessons to date.	6,000
11	Paid assistants' wages.	650

Required
Using the following accounts: Cash; Accounts Receivable; Prepaid Rent; Prepaid Insurance; Equipment; Accumulated Depreciation-Equipment; Accounts Payable; Utilities Payable; Unearned Karate Fees; Common Stock; Retained Earnings; Karate Fees Earned; Advertising Expense; Repairs Expense; Wages Expense; Rent Expense; Insurance Expense; Depreciation Expense-Equipment; and Utilities Expense.

a. Record the transactions in the general journal.

b. Post the transactions to the ledger accounts.

c. Prepare an unadjusted trial balance as of June 30.

d. Prepare and record the adjusting entries for rent expense, insurance expense, depreciation expense, utilities expense, and karate fees earned in the general journal. Depreciation expense for June is $90 and estimated utilities expense for June is $200. Post the adjusting entries to the ledger accounts in part b.

a.

				Description Debit Credit To record issuance of common stock. Cash To record purchase of equipment. To record payment of 6 months rent. Paid one-year premium on liability insurance. Paid for June newspaper advertising. To record billings for karate classes. Received advance payment for participants. Collection on account from participants To record repair to damaged wall. Billed participants for lessons given. Paid assistants wages.

b.

Cash
(1)	Answer	Answer
(2)	Answer	Answer
(3)	Answer	Answer
(4)	Answer	Answer
(5)	Answer	Answer
(7)	Answer	Answer
(8)	Answer	Answer
(9)	Answer	Answer
(11)	Answer	Answer
Bal	Answer	Answer

Accounts Receivable
(6)	Answer	Answer
(8)	Answer	Answer
(10)	Answer	Answer
Bal	Answer	Answer

Unearned Karate Fees
(7)	Answer	Answer
unadj.Bal	Answer	Answer
(16)	Answer	Answer
Bal	Answer	Answer

Utilities Expense
(15)	Answer	Answer
Bal	Answer	Answer

Accounts Payable
(2)	Answer	Answer
Bal	Answer	Answer

Common Stock
(1)	Answer	Answer
Bal	Answer	Answer

Karate Fees Earned
(6)	Answer	Answer
(10)	Answer	Answer
unadj.Bal	Answer	Answer
(16)	Answer	Answer
Bal	Answer	Answer

Wage Expense
(11)	Answer	Answer
Bal	Answer	Answer

Repairs Expense
(9)	Answer	Answer
Bal	Answer	Answer

Utilities Payable
(15)	Answer	Answer
Bal	Answer	Answer

Accum. Depr.-Equipment
(14)	Answer	Answer
Bal	Answer	Answer

Depr. Exp.-Equipment
(14)	Answer	Answer
Bal	Answer	Answer

Advertising Expense
(5)	Answer	Answer
Bal	Answer	Answer

Prepaid Insurance
(4)	Answer	Answer
unadj.Bal	Answer	Answer
(13)	Answer	Answer
Bal	Answer	Answer

Insurance Expense
(13)	Answer	Answer
Bal	Answer	Answer

Equipment
(2)	Answer	Answer
Bal	Answer	Answer

Prepaid Rent
(3)	Answer	Answer
unadj.Bal	Answer	Answer
(12)	Answer	Answer
Bal	Answer	Answer

Rent Expense
(12)	Answer	Answer
Bal	Answer	Answer

c.

HUANG KARATE SCHOOL Unadjusted Trial Balance June 30
		Debit		Credit
Cash		$Answer		$Answer
Accounts Receivable		Answer		Answer
Prepaid Rent		Answer		Answer
Prepaid Insurance		Answer		Answer
Equipment		Answer		Answer
Accounts Payable		Answer		Answer
Unearned Karate Fees		Answer		Answer
Common Stock		Answer		Answer
Karate Fees Earned		Answer		Answer
Repairs Expense		Answer		Answer
Advertising Expense		Answer		Answer
Wages Expense		Answer		Answer
Totals		$Answer		$Answer

d.

Description	Debit	Credit
To record June rent expense.
To record June insurance expense.
To record June depreciation on equipment.
To record estimated June utilities expense.

To record portion of advance payment earned in June.

Answer 1

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Part A:
Event	Account	Debit	Credit
1	Cash	$ 11,500
1	Common Stock		$ 11,500
2	Equipment	$    6,750
2	Cash		$    1,150
2	Accounts Payable		$    5,600
3	Prepaid Rent	$    7,452
3	Cash		$    7,452
4	Prepaid Insurance	$        876
4	Cash		$        876
5	Advertising Expense	$        625
5	Cash		$        625
6	Accounts Receivable	$    6,200
6	Karate Fees Earned		$    6,200
7	Cash	$    1,455
7	Unearned Karate Fees		$    1,455
8	Cash	$    5,800
8	Accounts Receivable		$    5,800
9	Repairs Expense	$        675
9	Cash		$        675
10	Accounts Receivable	$    6,000
10	Karate Fees Earned		$    6,000
11	Wages Expense	$        650
11	Cash		$        650

Part B:

Account	Event	Debit	Credit	Balance
Accounts Payable	2		5600	5600
	Balance			5600
Accounts Receivable	6	6200		6200
	8		5800	400
	10	6000		6400
Balance				6400
Advertising Expense	5	625		625
Balance				625
Cash	1	11500		11500
	2		1150	10350
	3		7452	2898
	4		876	2022
	5		625	1397
	7	1455		2852
	8	5800		8652
	9		675	7977
	11		650	7327
Balance				7327
Common Stock	1		11500	11500
Balance				11500
Equipment	2	6750		6750
Balance				6750
Karate Fees Earned	6		6200	6200
	10		6000	12200
unadjusted Balance				12200
	16		485	12685
Balance				12685
Prepaid Insurance	4	876		876
Unadjusted Balance				876
	13		73	803
Balance				803
Prepaid Rent	3	7452		7452
Unadjusted Balance				7452
	12		1242	6210
Balance				6210
Repairs Expense	9	675		675
Balance				675
Unearned Karate Fees	7		1455	1455
Unadjusted Balance				1455
	16	485		970
Balance				970
Wages Expense	11	650		650
Balance				650
Rent expense	12	1242		1242
Balance				1242
Insurance Expense	13	73		73
Balance				73
Depreciation Expense	14	90		90
Balance				90
Acc Dep	14		90	90
Balance				90
Utilities Expense	15	200		200
Balance				200
Utilities Payable	15		200	200
Balance				200

Part C

HUANG KARATE SCHOOL
Unadjusted Trial Balance
Jun-30
	Debit	Credit
Cash	$      7,327
Accounts Receivable	$      6,400
Prepaid Rent	$      7,452
Prepaid Insurance	$         876
Equipment	$      6,750
Accounts Payable	$           -	$      5,600
Unearned Karate Fees	$           -	$      1,455
Common Stock	$           -	$     11,500
Karate Fees Earned	$           -	$     12,200
Repairs Expense	$         675
Advertising Expense	$         625
Wages Expense	$         650
Totals	$     30,755	$     30,755

Part D

Adjusting:
12	Rent Expense	$    1,242		7452/6
12	Prepaid Rent		$    1,242
13	Insurance Expense	$          73		876/12
13	Prepaid Insurance		$          73
14	Depreciation Expense-Equipment	$          90
14	Accumulated Depreciation-Equipment		$          90
15	Utilities Expense	$        200
15	Utilities Payable		$        200
16	Unearned Karate Fees	$        485
16	Karate Fees Earned		$        485