Question

38. The following transactions were journalized and posted to the proper accounts for Carlos, Inc. Prepare a trial balance at the end of the first month using the following details: a) Carlos, Inc., received $15,000 cash and issued common stock. b) Carlos, Inc. paid the first month's rent with $900 cash. c) Purchased equipment by paying $4,000 cash and also signing a note payable for another $4,500. d) Purchased office supplies for $200 cash. The supplies remain at the end of the month. e) Carlos, Inc. billed clients for a total of $7,000 for design services rendered. f) Received $2,000 cash from clients for services rendered above.

Answer 1

Solution:

Journal Entries - Carlos INC.
S. No	Particulars	Debit	Credit
a	Cash A/c Dr	$15,000.00
	To Common Stock		$15,000.00
	(Being shares issued for cash)
b	Rent A/c Dr	$900.00
	To Cash		$900.00
	(Being rent paid for 1 month)
c	Equipment A/c Dr	$8,500.00
	To Cash		$4,000.00
	To Notes Payable		$4,500.00
d	Office supplies A/c Dr	$200.00
	To Cash		$200.00
	(Being office supplies purchased for cash)
e	Accounts receivables Dr	$7,000.00
	To Service revenue		$7,000.00
	(Being revenue recognized)
f	Cash A/c Dr	$2,000.00
	To Accounts receivables		$2,000.00
	(Being cash received from clients)

Cash Account
Particulars	Debit	Particulars	Credit
To Common Stock	$15,000.00	By Rent	$900.00
To Accounts receivables	$2,000.00	By Equipment	$4,000.00
		By Office Supplies	$200.00
		By balance c/f	$11,900.00
Total	$17,000.00	Total	$17,000.00

Common Stock Account
Particulars	Debit	Particulars	Credit
To balance c/f	$15,000.00	By Cash	$15,000.00
Total	$15,000.00	Total	$15,000.00

Rent Account
Particulars	Debit	Particulars	Credit
To Cash	$900.00	By balance C/f	$900.00
Total	$900.00	Total	$900.00

Equipment Account
Particulars	Debit	Particulars	Credit
To Cash	$4,000.00	By balance c/f	$8,500.00
To Notes Payable	$4,500.00
Total	$8,500.00	Total	$8,500.00

Notes Payable Account
Particulars	Debit	Particulars	Credit
To balance c/f	$4,500.00	By Equipment	$4,500.00
Total	$4,500.00	Total	$4,500.00

Office Supplies Account
Particulars	Debit	Particulars	Credit
To Cash	$200.00	By balance c/f	$200.00
Total	$200.00	Total	$200.00

Service Revenue Account
Particulars	Debit	Particulars	Credit
To balance c/f	$7,000.00	By Accounts Receivables	$7,000.00
Total	$7,000.00	Total	$7,000.00

Accounts Receivables Account
Particulars	Debit	Particulars	Credit
To Service Revenue	$7,000.00	By Cash	$2,000.00
		By balance c/f	$5,000.00
Total	$7,000.00	Total	$7,000.00

Trial Balance - Carlon INC.
Accounts	Debit	Credit
Cash	$11,900.00
Rent	$900.00
Equipment	$8,500.00
Office Supplies	$200.00
Accounts Receivables	$5,000.00
Common Stock		$15,000.00
Notes Payable		$4,500.00
Service Revenue		$7,000.00
Total	$26,500.00	$26,500.00