Question

January Transactions

1-thg 1 Performed car repair services and received cash at the time of sale, $4,350.

2-thg 1 Paid for the car parts purchased on account last year, $790.

4-thg 1 Paid wages and salaries for $2,575, part of which was accrued in December.

10-thg 1 Paid the utility bill that was already accrued in December in utilities payable.

16-thg 1 Collected cash from credit sales made last year, $1,800.

20-thg 1 Purchased $4,500 of equipment, paid $2,250 cash and issued a note for $2,250.

22-thg 1 Performed car repair services on account, $3,940.

27-thg 1 Paid dividends to the company's owners, $300.

January Adjusting Entries

31-thg 1 The estimated depreciation on building and equipment is $770.

31-thg 1 One month of rent has expired, $850. 31-thg 1 The annual interest rate is 4% on all notes and paid quarterly. It was last paid on Dec 31 of the prior year. Round to the nearest dollar. 31-thg 1 The supplies remaining at the end of the month was $680.

31-thg 1 Accrued wages and salaries worked in January that will be paid 2-4, $1,790.

31-thg 1 The estimated income taxes for the month is $655.

• Record January transactions in the General Journal and post to the General Ledger.
• Record adjusting entries for January in the General Journal and post to the General Ledger.
• Prepare the adjusted trial balance as of January 31.

Answer 1

Recording of January Month Transaction in journal & Posting It to ledger account

Date	Particulars	Debit ($)	Credit($)
1st January	Cash	4350
	To Service Revenue		4350
2nd January	Accounts Payable	790
	To Cash		790
4th January	Wages & Salaries Payable	2575
	To Cash		2575
10th January	Electricity Payable	XXXX
	To Cash		XXXX
	(amount not specified in the question)
16th January	Cash	1800
	To Accounts Receivable		1800
20th January	Equipment	4500
	To Cash		2250
	To Notes Payable		2250
22nd January	Accounts Receivable	3940
	To Service revenue		3940
27th January	Dividend	300
	To cash		300

1. Cash Account

Particulars	Debit ($)		Particulars	Credit ($)
1 Jan Service Revenue	4350		2Jan Accounts Payable	790
16 Jan Accounts Receiveble	1800		4 Jan. Wages & Salaries Payable	2575
			10Jan. Electricity Payable	XXX
			20Jan. Equipment	2250
			27Jan. Dividend	300
			By Closing Balance	xxxx

2. Service Revenue Account

Particulars	Debit ($)		Particulars	Credit ($)
			2Jan. cash	4350
			22Jan. Accounts Receiveble	3940
			Balance	8290

3. Accounts Payable Account

Particulars	Debit ($)		Particulars	Credit ($)
2Jan. Cash	790		1Jan. Opening Balance	790

4. Wages & Salaries Payable Account

Particulars	Debit ($)		Particulars	Credit ($)
4Jan. Cash	2575		1Jan. Opening Balance	2575

5. Electricity Payable Account

Particulars	Debit ($)		Particulars	Credit ($)
10Jan. Cash	xxxx		1Jan. Opening Balance	xxxx

6. Accounts Receivable Account

Particulars	Debit ($)		Particulars	Credit ($)
1 Jan. Opening Balance	1800		16Jan. Cash	1800
22 Jan. Service Revenue	3940
			By Closig Balance	3940

  

7. Equipment Account

Particulars	Debit ($)		Particulars	Credit ($)
20 Jan. Cash	2250
20Jan. Notes Payable	2250

8. Dividend Account

Particulars	Debit ($)		Particulars	Credit ($)
27 Jan. Cash	300

-------------------------------------------------------------------

Recording Adjusting Journal entry & Posting It to ledger account

Date	Particulars	Debit ($)	Credit($)
31 January	Depreciation expenses	770
	To Building & Equipment		770
31 January	Rent Expenses	850
	To Rent payable		850
31 January	Intrest on notes Payable	2.5
	To Notes Payable		2.5
	(2250*4% *10days /360 days)
31 January	Supplies Expenses	XXXX
	To Supplies		XXXX
	(opening supplies is not given)
31 January	Wages & Salaries Expenses	1790
	To Wages & Salaries Payable		1790
31 January	Income tax Expenses	655
	To Income Tax Payable		655

9. Depreciation Expenses Account

Particulars	Debit ($)		Particulars	Credit ($)
31 Jan. Building & Equipment	770

10. Rent Expenses Account

Particulars	Debit ($)		Particulars	Credit ($)
31 Jan. Rent Payable	850
			Balance	850

7. Equipment Account

Particulars	Debit ($)		Particulars	Credit ($)
20 Jan. Cash	2250		31 Jan Depreciation	770
20Jan. Notes Payable	2250

11. Rent Payable Account

Particulars	Debit ($)		Particulars	Credit ($)
			31 Jan Rent Expenses	850
Balance	850

12. Notes Payable Account

Particulars	Debit ($)		Particulars	Credit ($)
			20 Jan Equipment	4500
			31 Jan . Interest on notes payable	2.5
Balance	4502.5

13. Interest on Notes payable Account

Particulars	Debit ($)		Particulars	Credit ($)
31Jan. Notes Payable	2.5
			balance	2.5

14. Supplies Expenses Account

Particulars	Debit ($)		Particulars	Credit ($)
31 Jan. Supplies	680

4. Wages & Salaries Payable Account

Particulars	Debit ($)		Particulars	Credit ($)
4Jan. Cash	2575		1Jan. Opening Balance	2575
			31 Jan. Wages & Salaries Expenses	1790
Balance	1790

15. Wages & Salaries Expenses Account

Particulars	Debit ($)		Particulars	Credit ($)
31 Jan. Wages & Salaries Payable	1790
			balance 1790

16. Income Tax Expenses Account

Particulars	Debit ($)		Particulars	Credit ($)
31 Jan. Income Tax Payable	655
			balance	655

17. Income Tax payable Account

Particulars	Debit ($)		Particulars	Credit ($)
			31 Jan income tax	655
balance	655

Adjusted Trial Balance for 31 Jan

Particulars	Debit ($)	Credit($)
Cash	xxxx
Service Revenue		8290
Accounts Payable		0
Wages & Salaries Payable		1790
Electricity Payable		xxxx
Electricity Expenses	xxxx
Accounts Receiveble	3940
Equipment	4500
Depreciation		770
Dividend	300
Rent Expenses	850
Rent Payable		850
Notes Payable		4502.5
Interest on Notes Payable	2.5
Wages and salaries expenses	1790
Income tax expenses	655
Income tax payable		655
Supplies	680
Supplies Expenses		xxxx
	XXXXXXXX	XXXXXXX

Note- the above xxxx marked informations are not given in the question. Hence the final total balance of Adjusted TB couldnot be derived.