Question

Journalizing and Posting Transactions and Adjustments
D. Roulstone opened Roulstone Roofing Service on April 1. Transactions for April follow.

Apr.1	Roulstone contributed $11,500 cash to the business in exchange for common stock.
2	Paid $6,100 cash for the purchase of a used truck.
2	Purchased $6,200 of ladders and other equipment; the company paid $1,000 cash, with the balance due in 30 days.
3	Paid $2,880 cash for two-year (or 24-month) premium toward liability insurance.
5	Purchased $1,200 of supplies on credit.
5	Received an advance of $1,800 cash from a customer for roof repairs to be done during April and May.
12	Billed customers $5,500 for roofing services performed.
18	Collected $4,900 cash from customers toward their accounts billed on April 12.
29	Paid $675 cash for truck fuel used in April.
30	Paid $100 cash for April newspaper advertising.
30	Paid $4,500 cash for assistants' wages earned.
30	Billed customers $4,000 for roofing services performed.

Using the following accounts: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Trucks; Accumulated Depreciation-Trucks; Equipment; Accumulated Depreciation-Equipment; Accounts Payable; Unearned Roofing Fees; Common Stock; Roofing Fees Earned; Fuel Expense; Advertising Expense; Wages Expense; Insurance Expense; Supplies Expense; Depreciation Expense-Trucks; and Depreciation Expense-Equipment.

b. Record these transactions for April using journal entries.

General Journal
Date	Description	Debit	Credit
Apr. 1	AnswerAccounts ReceivableAccounts PayableCommon StockCash	Answer	Answer
	AnswerAccounts ReceivableAccounts PayableCommon StockCash	Answer	Answer
	Owner invested cash.
Apr. 2	AnswerCashAccounts ReceivableTruckAccounts Payable	Answer	Answer
	AnswerCashAccounts ReceivableTruckAccounts Payable	Answer	Answer
	Purchased truck.
Apr. 2	AnswerSuppliesAccounts ReceivableAccounts PayableEquipment	Answer	Answer
	Cash	Answer	Answer
	AnswerSuppliesAccounts ReceivableAccounts PayableEquipment	Answer	Answer
	Purchased equipment.
Apr. 3	AnswerAccounts PayableAccounts ReceivablePrepaid InsuranceCash	Answer	Answer
	AnswerAccounts PayableAccounts ReceivablePrepaid InsuranceCash	Answer	Answer
	Purchased liability insurance.
Apr. 5	AnswerAccounts PayableSuppliesEquipmentAccounts Receivable	Answer	Answer
	AnswerAccounts PayableSuppliesEquipmentAccounts Receivable	Answer	Answer
	Purchased supplies.
Apr. 5	AnswerUnearned Roofing FeesAccounts ReceivableCashAccounts Payable	Answer	Answer
	AnswerUnearned Roofing FeesAccounts ReceivableCashAccounts Payable	Answer	Answer
	Received advanced payment for repair work.
Apr. 12	AnswerEquipmentAccounts ReceivableAccounts PayableRoofing Fees Earned	Answer	Answer
	AnswerEquipmentAccounts ReceivableAccounts PayableRoofing Fees Earned	Answer	Answer
	Billed for services performed.
Apr. 18	AnswerSuppliesCashAccounts PayableAccounts Receivable	Answer	Answer
	AnswerSuppliesCashAccounts PayableAccounts Receivable	Answer	Answer
	Collected from customers billed on April 12.
Apr. 29	AnswerFuel ExpenseCashAccounts ReceivableAccounts Payable	Answer	Answer
	AnswerFuel ExpenseCashAccounts ReceivableAccounts Payable	Answer	Answer
	Paid for April fuel expense.
Apr. 30	AnswerAdvertising ExpenseAccounts PayableCashEquipment	Answer	Answer
	AnswerAdvertising ExpenseAccounts PayableCashEquipment	Answer	Answer
	Paid for April newspaper advertising.
Apr. 30	AnswerCashSuppliesAccounts PayableWages Expense	Answer	Answer
	AnswerCashSuppliesAccounts PayableWages Expense	Answer	Answer
	Paid wages.
Apr. 30	AnswerEquipmentAccounts ReceivableAccounts PayableRoofing Fees Earned	Answer	Answer
	AnswerEquipmentAccounts ReceivableAccounts PayableRoofing Fees Earned	Answer	Answer
	Recorded fees earned.

c. Post the above journal entries from part b. to their T-accounts.

Enter transactions in the T-accounts in the order they appear, using the first available answer box on the appropriate side of the T-account.

Cash
	Answer	Answer
	Answer	Answer
	Answer	Answer
	Answer	Answer
	Answer	Answer
	Answer	Answer

Accounts Receivable
	Answer	Answer
	Answer	Answer

Supplies
	Answer	Answer

Prepaid Insurance
	Answer	Answer

Trucks
	Answer	Answer

Equipment
	Answer	Answer

Accumulated Depreciation - Equipment
	Answer	Answer

Accumulated Depreciation - Trucks
	Answer	Answer

Accounts Payable
	Answer	Answer
	Answer	Answer

Unearned Roofing Fees
	Answer	Answer

Common Stock
	Answer	Answer

Roofing Fees Earned
	Answer	Answer
	Answer	Answer
	Answer	Answer

Depreciation Expense - Trucks
	Answer	Answer

Fuel Expense
	Answer	Answer

Advertising Expense
	Answer	Answer

Depreciation Expense - Equipment
	Answer	Answer

Wages Expense
	Answer	Answer

Supplies Expense
	Answer	Answer

Insurance Expense
	Answer	Answer

• Record insurance expense for April.
• Supplies still available on April 30 was $200.
• Record depreciation expense of $125 for truck for April.
• Record depreciation expense of $35 for equipment for April.
• One-fourth of roofing fee received April 5, was earned by April 30.

General Journal
Date	Description	Debit	Credit
Apr. 30	AnswerCashInsurance ExpensePrepaid InsuranceAccounts Payable	Answer	Answer
	AnswerCashInsurance ExpensePrepaid InsuranceAccounts Payable	Answer	Answer
	To record insurance expense.
Apr. 30	AnswerSuppliesSupplies ExpenseAccounts PayableCash	Answer	Answer
	AnswerSuppliesSupplies ExpenseAccounts PayableCash	Answer	Answer
	To record supplies expense.
Apr. 30	AnswerAccumulated Depreciation-TrucksCashAccounts PayableDepreciation Expense-Trucks	Answer	Answer
	AnswerAccumulated Depreciation-TrucksCashAccounts PayableDepreciation Expense-Trucks	Answer	Answer
	To record truck depreciation expense.
Apr. 30	AnswerAccumulated Depreciation-EquipmentDepreciation Expense-EquipmentAccounts PayableCash	Answer	Answer
	AnswerAccumulated Depreciation-EquipmentDepreciation Expense-EquipmentAccounts PayableCash	Answer	Answer
	To record equipment depreciation expense.
Apr. 30	AnswerAccounts PayableRoofing Fees EarnedCashUnearned Roofing Fees	Answer	Answer
	AnswerAccounts PayableRoofing Fees EarnedCashUnearned Roofing Fees	Answer	Answer
	To record fees earned.

Answer 1

Journalizing the Transactions and Adjustments:-

Roulstone Roofing Service

General Journal

For the Month of April

Date	Accounts Title	Debit	Credit
April 1	Cash	$11,500
	Common Stock		$11,500
2	Trucks	$6,100
	Cash		$6,100
2	Equipment	$6,200
	Cash		$1,000
	Accounts Payable		$5,200
3	Prepaid Insurance	$2,880
	Cash		$2,880
5	Supplies	$1,200
	Accounts Payable		$1,200
5	Cash	$1,800
	Unearned Roofing Fees		$1,800
12	Accounts Receivable	$5,500
	Roofing Fees Earned		$5,500
18	Cash	$4,900
	Accounts Receivable		$4,900
29	Fuel Expense	$675
	Cash		$675
30	Advertising Expense	$100
	Cash		$100
30	Wages Expense	$4,500
	Cash		$4,500
30	Accounts Receivable	$4,000
	Roofing Fees Earned		$4,000
	Adjusting Entries:-
April 30	Insurance Expense	$120
	Prepaid Insurance		$120
30	Supplies Expense	$1,000
	Supplies		$1,000
30	Depreciation Expense, Trucks	$125
	Accumulated Depreciation, Trucks		$125
30	Depreciation Expense, Equipment	$35
	Accumulated Depreciation, Equipment		$35
30	Unearned Roofing Fees	$450
	Roofing Fees Earned		$450

Posting Transactions and Adjustments:- (Adjusting Entries=AE)

Cash

Date	Amount	Amount	Date
April 1	$11,500	$6,100	April 2
5	1,800	1,000	2
18	4,900	2,880	3
		675	29
		100	30
		4,500	30
		$2,945	Balance
Ending Bal.	$2,945

Accounts Receivable

April 12	$5,500	$4,900	18
30	4,000	$4,600	Balance
Ending Bal	$4,600

Supplies

April 5	$1,200	$1,000	30 AE
		$200	Balance
Ending Bal.	$200

Prepaid Insurance

April 3	$2,880	$120	30 AE
		$2,760	Balance
Ending Bal.	$2,760

Trucks

April 2	$6,100
Ending Bal.	$6,100

Accumulated Depreciation, Trucks

		$125	April 30 AE
		$125	Ending Bal.

Equipment

April 2	$6,200
Ending Bal.	$6,200

Accumulated Depreciation, Equipment

		$35	April 30 AE
		$35	Ending Bal.

Accounts Payable

Balance	$6,400	$5,200	April 2
		1,200	5
		$6,400	Ending Bal.

Unearned Roofing Fees

April 30 AE	$450	$1,800	April 5
Balance	$1,350
		$1,350	Ending Bal.

Common Stock

		$11,500	April 1
		$11,500	Ending Bal.

Roofing Fees Earned

		$5,500	April 12
		4,000	30
		450	30 AE
		$9,950	Ending Bal.

Fuel Expense

April 29	$675
Ending Bal.	$675

Advertising Expense

April 30	$100
Ending Bal.	$100

Wages Expense

April 30	$4,500
Ending Bal.	$4,500

Insurance Expense

April 30 AE	$120
Ending Bal.	$120

Supplies Expense

April 30 AE	$1,000
Ending Bal.	$1,000

Depreciation Expense, Trucks

April 30 AE	$125
Ending Bal.	$125

Depreciation Expense, Equipment

April 30 AE	$35
Ending Bal.	$35

Preparing Adjusted Trial Balance:-

Roulstone Roofing Service

Adjusted Trial Balance

April 30

Accounts	Debit	Credit
Cash	$2,945
Accounts Receivable	4,600
Supplies	200
Prepaid Insurance	2,760
Trucks	6,100
Accumulated Depreciation, Trucks		$125
Equipment	6,200
Accumulated Depreciation, Equipment		35
Accounts Payable		6,400
Unearned Roofing Fees		1,350
Common Stock		11,500
Roofing Fees Earned		9,950
Fuel Expense	675
Advertising Expense	100
Wages Expense	4,500
Insurance Expense	120
Supplies Expense	1,000
Depreciation Expense, Trucks	125
Depreciation Expense, Equipment	35
Totals	$29,360	$29,360

Working Notes:-

1. Prepaid Insurance $2,880 for 24 month, so Insurance Expense for one month is,

Insurance Expense=($2,880/24 months)

=$120

2.Supplies Expense for April=(Supplies Available for use - Supplies available on end of period)

=($1,200-$200)

=$1,000

5. One Fourth of Unearned Roofing Fees Earned,

Roofing Fees Earned=($1,800×1/4)

=$450