Question

In: Accounting

On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the...

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:
a. Amount of total revenue recorded in the ledger.
b. Amount of total expenses recorded in the ledger.
c. Amount of net income for January.
5. Determine the increase or decrease in owner’s equity for January.

Solutions

Expert Solution

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
                    -  
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

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