In: Accounting
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, $31,500. |
2 | Paid rent on office and equipment for the month, $2,750. | |
3 | Purchased supplies on account, $2,350. | |
4 | Paid creditor on account, $800. | |
5 | Earned fees, receiving cash, $16,160. | |
6 | Paid automobile expenses (including rental charge) for month, $1,640, and miscellaneous expenses, $450. | |
7 | Paid office salaries, $2,400. | |
8 | Determined that the cost of supplies used was $1,150. | |
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:
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5. | Determine the increase or decrease in owner’s equity for January. |
Answer 1. | |||
Journal Entry | |||
Date | Particulars | Dr. Amt. | Cr. Amt. |
1 | Cash | 31,500.00 | |
Sharon Matthews, Capital | 31,500.00 | ||
(record the capital introduced) | |||
2 | Rent Expense | 2,750.00 | |
Cash | 2,750.00 | ||
(record the rent paid) | |||
3 | Supplies | 2,350.00 | |
Accounts Payable | 2,350.00 | ||
(record the supplies purchased) | |||
4 | Accounts Payable | 800.00 | |
Cash | 800.00 | ||
(record the cash paid) | |||
5 | Cash | 16,160.00 | |
Fees earned | 16,160.00 | ||
(Record the fees earned) | |||
6 | Automobile Expenses | 1,640.00 | |
Miscellaneous Expense | 450.00 | ||
Cash | 2,090.00 | ||
(record the automobile & misc expense) | |||
7 | Salaries Expense | 2,400.00 | |
Cash | 2,400.00 | ||
(Record the salaries expense) | |||
8 | Supplies Expense | 1,150.00 | |
Supplies | 1,150.00 | ||
(record the supplies expense) | |||
9 | Sharon Matthews, Withdrawl | 2,000.00 | |
Cash | 2,000.00 | ||
(record the cash withdrawl) |
Answer 2. | |||||||||||||
Cash | Supplies | Accounts Payable | |||||||||||
1 | 31,500.00 | 2,750.00 | 2 | 3 | 2,350.00 | 1,150.00 | 8 | 4 | 800.00 | 2,350.00 | 3 | ||
5 | 16,160.00 | 800.00 | 4 | ||||||||||
2,090.00 | 6 | ||||||||||||
2,400.00 | 7 | ||||||||||||
2,000.00 | 9 | ||||||||||||
End. Bal. | 37,620.00 | End. Bal. | 1,200.00 | End. Bal. | 1,550.00 | ||||||||
Sharon Matthews, Capital | Sharon Matthews, Withdrawl | ||||||||||||
31,500.00 | 1 | 9 | 2,000.00 | ||||||||||
End. Bal. | 31,500.00 | End. Bal. | 2,000.00 | ||||||||||
Fees Earned | Automobile Expense | Rent Expense | |||||||||||
16,160.00 | 5 | 6 | 1,640.00 | 2 | 2,750.00 | ||||||||
End. Bal. | 16,160.00 | End. Bal. | 1,640.00 | End. Bal. | 2,750.00 | ||||||||
Misc. Expense | Salaries Expense | Supplies Expense | |||||||||||
6 | 450.00 | 7 | 2,400.00 | 8 | 1,150.00 | ||||||||
End. Bal. | 450.00 | End. Bal. | 2,400.00 | End. Bal. | 1,150.00 |
Trial Balance | ||
As on Jan 31, 2019 | ||
Accounts Title | Debits | Credits |
Cash | 37,620.00 | |
Supplies | 1,200.00 | |
Accounts Payable | 1,550.00 | |
Sharon Matthews, Capital | 31,500.00 | |
Sharon Matthews, Withdrawl | 2,000.00 | |
Fees Earned | 16,160.00 | |
Automobile Expense | 1,640.00 | |
Rent Expense | 2,750.00 | |
Misc. Expense | 450.00 | |
Salaries Expense | 2,400.00 | |
Supplies Expense | 1,150.00 | |
Total | 49,210.00 | 49,210.00 |
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Answer 4. | ||
a. Amount of total revenue recorded | 16,160.00 | |
b. Amount of total expenses recorded | ||
Automobile Expense | 1,640.00 | |
Rent Expense | 2,750.00 | |
Misc. Expense | 450.00 | |
Salaries Expense | 2,400.00 | |
Supplies Expense | 1,150.00 | |
Total expense | 8,390.00 | |
c. Amount of net income ($16,160 - $8,390) | 7,770.00 | |
Answer 5. | ||
Increase (Decrease) in Owner's Equity | ||
Net Income | 7,770.00 | |
Sharon Matthews, Withdrawl | (2,000.00) | |
Increase (Decrease) in Owner's Equity | 5,770.00 |