Question

4. Prepare an unadjusted trial balance as of July 31, 2019.

PS Music

UNADJUSTED TRIAL BALANCE

July 31, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Insurance
5	Office Equipment
6	Accounts Payable
7	Unearned Revenue
8	Peyton Smith, Capital
9	Peyton Smith, Drawing
10	Fees Earned
11	Wages Expense
12	Office Rent Expense
13	Equipment Rent Expense
14	Utilities Expense
15	Music Expense
16	Advertising Expense
17	Supplies Expense
18	Miscellaneous Expense
19	Totals

The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business’s operations:

Jul.	1	Peyton Smith made an additional investment in PS Music by depositing $5,000 in PS Music’s checking account.
	1	Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750.
	1	Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
	2	Received $1,000 cash from customers on account.
	3	On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months.
	3	Paid $250 to creditors on account.
	4	Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)
	5	Purchased office equipment on account from Office Mart, $7,500.
	8	Paid for a newspaper advertisement, $200.
	11	Received $1,000 for serving as a disc jockey for a party.
	13	Paid $700 to a local audio electronics store for rental of digital recording equipment.
	14	Paid wages of $1,200 to receptionist and part-time assistant.

Enter the following transactions on Page 2 of the two-column journal:

Jul.	16	Received $2,000 for serving as a disc jockey for a wedding reception.
	18	Purchased supplies on account, $850.
	21	Paid $620 to Upload Music for use of its current music demos in making various music sets.
	22	Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.
	23	Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 2019.
	27	Paid electric bill, $915.
	28	Paid wages of $1,200 to receptionist and part-time assistant.
	29	Paid miscellaneous expenses, $540.
	30	Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 2019.
	31	Received $3,000 for serving as a disc jockey for a party.
	31	Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July.
	31	Withdrew $1,250 cash from PS Music for personal use.

PS Music’s chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows:

11	Cash	$3,920
12	Accounts Receivable	1,000
14	Supplies	170
15	Prepaid Insurance	—
17	Office Equipment	—
21	Accounts Payable	250
23	Unearned Revenue	—
31	Peyton Smith, Capital	4,000
32	Peyton Smith, Drawing	500
41	Fees Earned	6,200
50	Wages Expense	400
51	Office Rent Expense	800
52	Equipment Rent Expense	675
53	Utilities Expense	300
54	Music Expense	1,590
55	Advertising Expense	500
56	Supplies Expense	180
59	Miscellaneous Expense	415

	Required:
1.	Use the data in Accounting Equation Grid panel (reproduced from Chapter 1 Continuing Problem) and enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and select a check mark in the Posting Reference column. (Hint: Verify the equality of the debit  and credit balances in the ledger before proceeding with the next instruction.)
2.	Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. Refer to the Chart of Accounts for exact wording of account titles.
3.	Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. Indicate a zero balance by inserting a 0 (zero) in either of the Balance columns opposite the entry.
4.	Prepare an unadjusted trial balance as of July 31, 2019. CHART OF ACCOUNTS PS Music General Ledger ASSETS 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Insurance 17 Office Equipment LIABILITIES 21 Accounts Payable 23 Unearned Revenue EQUITY 31 Peyton Smith, Capital 32 Peyton Smith, Drawing REVENUE 41 Fees Earned EXPENSES 50 Wages Expense 51 Office Rent Expense 52 Equipment Rent Expense 53 Utilities Expense 54 Music Expense 55 Advertising Expense 56 Supplies Expense 59 Miscellaneous Expense

Answer 1

								Cash A/c
	Jul-01	Cash	5000			To Balance B/d	3920	By Rent	1750
		To Smith Capital		5000		To Smith Capital	5000	By Insurance	2700
						To Accounts Receivable	1000	By Accounts Payable	250
	Jul-01	Rent Expense	1750			To Unearned Revenue	7200	By Miscellaneous Expense	900
		To Cash		1750		To Income	1000	By Advertising	200
						To Income	2000	By Equipment Rent Expense	700				Unadjusted Trial balance As on 31-july-2019
	Jul-01	Insurance Premium	2700			To Income	2500	By Wages	1200					Cash	13945
		To Cash		2700		To Unearned Revenue	750	By Music Expense	620					Supplies	1020
						To Income	1500	By Advertising	800					Accounts Payable		8350
	Jul-02	Cash	1000			To Unearned Revenue	500	By Electricity	915					Smith Capital		9000
		To Accounts Receivable		1000		To Income	3000	By Wages	1200					Smith Drawings	1750
								By Miscellaneous Expense	540					Unearned Revenue		8450
	Jul-03	Cash	7200					By Music Expense	1400					Office Equipment	7500
		To Unearned Revenue		7200				By Drawings	1250					Office Rent	1750
								By Balance B/d	13945					Insurance Premium	2700
							28370		28370					Miscellaneous Expense	1440
	Jul-03	Accounts Payable	250					Accounts Receivable						Advertising Expense	200
		To cash		250		To Balance B/d	1000	By Cash	1000					Equipment Rent Expense	700
							1000		1000					Wages	2400
	Jul-04	Miscellaneous Expense	900											Music Expense	2020
		To Cash		900				Supplies						Advertising Expense	800
						To Balance B/d	170	By Balance B/d	1020					Electricity	915
	Jul-05	Office Equipment	7500			To Accounts Payable	850							Fees Earned		10000
		To Office Mart		7500			1020		1020					Retained Earnings(Note)		1340
														TOTAL	37140	37140
	Jul-08	Advertising Expense	200
		To Cash		200			Accounts Payable								Note		Retained Earnings A/c As on July-01 2019
						To cash	250	By Balance B/d	250							Wages Expense	400	Fees Earned	6200
	Jul-11	Cash	1000					By office Equipment	7500							Office Rent	800
		To Income		1000		To Balance C/d	8350	By Supplies	850							Equipment Rent Expense	675
							8600		8600							Utilities Expense	300
	Jul-13	Equipment Rent Expense	700													Music Expense	1590
		To Cash		700			Smith Capital									Advertising Expense	500
						To Balance C/d	9000	By Balance B/d	4000							Supplies Expense	180
	Jul-14	Wages	1200					By Cash	5000							Miscellaneous Expense	415
		To Cash		1200			9000		9000							Profit	1340
																	6200		6200
	Jul-16	Cash	2000				Smith Drawings
		To Income		2000		To Balance B/d	500	By Balance C/d	1750
						To Cash	1250
	Jul-18	Supplies	850				1750		1750
		To Accounts Payable		850
	Jul-21	Music Expense	620
		To Cash		620			Unearned Revenue
						To Balance C/d	8450	By Cash	7200
	Jul-22	Advertising Expense	800					By Cash	750
		To Cash		800				By Cash	500
							8450		8450
	Jul-23	Cash	2500
		To Income		2500			Office Equipment
						To Office Mart	7500	By Balance C/d	7500
	Jul-23	Cash	`750				7500		7500
		To Unearned Revenue		750
	Jul-27	Electricity Expense	915
		To Cash		915
	Jul-28	Wages	1200
		To Cash		1200
	Jul-29	Miscellaneous Expense	540
		To Cash		540
	Jul-30	Cash	1500
		To Income		1500
	Jul-30	Cash	500
		To Unearned Revenue		500
	Jul-31	Cash	3000
		To Income		3000
	Jul-31	Music Expense(Royalty)	1400
		To cash		1400
	Jul-31	Drawings	1250
		To Cash		1250