Question

GENERAL INSTRUCTIONS FOR JANUARY

1) Journalize the transactions listed below and on the next page and post to the ledger accounts. Omit explanations. 2) Prepare an unadjusted trial balance. 3) Journalize the adjusting entries and post to the general ledger. Adjustment data are provided on the next page. 4) Prepare an adjusted trial balance. 5) Prepare a schedule of accounts receivable. List the balance of each customer account with a balance and total the balances. Compare the total to the balance of Accounts Receivable in the general ledger. 6) Prepare an income statement for the month ended January 31, 20--. 7) Prepare a retained earnings statement for the month ended January 31, 20--. 8) Prepare a balance sheet as of January 31, 20--. 9) Complete the analysis test for January on page 27. TRANSACTIONS FOR JANUARY

General Entries Jan. 5 Received $60,000 from Sophia LeBron and issued 12,000 common shares of $5 par value. 5 Paid $6,000 of general liability and property insurance. The disbursement by Check No. 100 was for a complete year of service. 6 Rented an office and furniture for $2,000 per month. Issued Check No. 101 for $6,000, representing the first and last months’ rent and the security deposit. (The security deposit, the last month’s rent, and the current rent are to be classified separately.) 7 Issued Check No. 102 for $1,600 for the purchase of office supplies. 7 Issued Check No. 103 for $7,000 for advertising to be run in local newspapers and magazines in the month of January. 10 Roxana Perini engaged My Place, House of Décor to renovate her oceanfront condominium. Received $10,000 from Roxana Perini after services were completed. 12 Recorded $6,000 (net 30) decorating fees earned on account from Maribel Thompson to remodel her office. My Place, House of Décor 26 Jan. 20 Received $8,000 from Frederick Lombart, a customer. These fees were related to services rendered to improve his office’s lobby. 25 Recorded $12,000 (net 60) decorating fees revenue earned on account from Roberto Andriani, a long-time customer who wanted to enhance his residence’s decor. 30 Issued Check No. 104 for $190 to pay the utilities bill for the month. 30 Issued Check No. 105 for $300 in payment of the telephone bill for the month. 30 Issued Check No. 106 for $200 for postage. 30 Issued Check No. 107 for $450 for business automobile expenses. 30 Issued Check No. 108 for $5,600 to Sophia LeBron for salary. (Payroll taxes are not considered in this entry. Transactions in later months will show you how to journalize payroll tax deductions and expenses.) Adjusting Entries a) Expired insurance for the period, $500. b) Supplies on hand as of the end of the month, $1,000.  

JANUARY ANALYSIS Name Date Grade From the statements you prepared for January, provide the following amounts: Adjusted Trial Balance 1) Trial balance totals............................................................................................. ______________ Schedule of Accounts Receivable 2) Schedule of accounts receivable total................................................................ ______________ Income Statement 3) Total revenue for the period (January)............................................................... ______________ 4) Total expenses.................................................................................................... ______________ 5) Net income......................................................................................................... ______________ Retained Earnings Statement 6) Ending retained earnings amount transferred to balance sheet.......................... ______________ Balance Sheet 7) Total assets as of January 31, 20-- ..................................................................... ______________ 8) Total liabilities and stockholder’s equity as of January 31, 20-- ....................... ______________ Optional (software users) Post-Closing Trial Balance 9) Post-closing trial balance total........................................................................... ______________ My Place,

Answer 1

Solution

Journal

SL NO	DATE	Particular	DEBIT ($)	CREDIT ($)
1	5 Jan	Bank	60,000
		To Share Capital		60,000
2	5 Jan	General Liability & Property Insurance	6,000
		To Bank		6,000
3	6 Jan	Rent deposit	2,000
		Office & Furniture Rent	2,000
		Office & Furniture Rent	2,000
		To Bank		6,000
4	7Jan	Office Stationery	1,600
		To Bank		1,600
5	7 Jan	Advertisement	7,000
		To Bank		7,000
6	10 Jan	Bank	10,000
		To Service Income		10,000
7	12 Jan	Maribel Thompson	6,000
		Discount	30
8	20 Jan	Bank	8,000
		To Service Fees		8,000
9	25 Jan	Roberto Adriana	12,000
		Discount	60
		To Service Fees		12,060
10	30 Jan	Utilities	190
		To Bank		190
11	30 Jan	Telephone	300
		To Bank		300
12	30 Jan	Postage	200
		To Bank		200
13	30 Jan	Business Automobile	450
		To Bank		450
14	30 Jan	Salary	5,600
		To Bank		5,600

Journal adjustment entries

SL NO	DATE	PATICULAR	DEBIT ($)	CREDIT ($)
1	30-Jan	Prepaid Insurance	5,500
		General Liability & Property Insurance		5,500
2	30-Jan	Stationery Stock	1,000
		To Office Stationery		1,000

My palace house of decor

Unadjusted Trial Balance

January 31, 20

ACCT. NO	ACCOUNT TITLE	DEBIT ($)	CREDIT ($)
	Bank	50,660
	Share Capital		60,000
	General Liability & Property Insurance	6,000
	Rent Deposit	2,000
	Office Rent	4,000
	Office Stationery	1,600
	Advertisement	7,000
	Service Income		10,000
	Service Fees		26,090
	Discount	90
	Maribal Thompson	6,000
	Roberto Andriani	12,000
	Utilities	190
	Telephone	300
	Postage	200
	Business Automobile	450
	Salary	5,600
	TOTAL	96,090	96,090

MY PLACE, HOUSE OF DÉCOR

Adjusted Trail Balance

January 31, 20.

ACCT. NO	ACCOUNT TITLE	DEBIT ($)	CREDIT ($)
	Prepaid Insurance	5,500.00
	Stationery Stock	1,000.00
	General Liability & Property Insurance		5,500.00
	To Office Stationery		1,000.00
	TOTAL	6,500.00	6,500.00

MY PLACE, HOUSE OF DÉCOR

Schedule of Account Receivable

January 31, 20…

SL .NO	NAME OF CUSTOEMR	AMOUNT ($)
1	Maribel Thompson	6,000
2	Roberto Adriana	12,000
	Total	18,000

MY PLACE, HOUSE OF DÉCOR

Income Statement

Month ended January 31, 20

Income		Amount
Service Income	10,000
Service Fees	26,090	36,090
Total		36,090

MY PLACE, HOUSE OF DÉCOR

Retained Earnings Statement

For the month ended January 31, 20

PARTICULARS		AMOUNT ($)
	Income		36,090
	EXPENSES
	Office Rent	4,000
	Office Stationery	600
	Advertisement	7,000
	General Liability & Property Insurance	500
	Discount	90
	Utilities	190
	Telephone	300
	Postage	200
	Business Automobile	450
	Salary	5,600	18,930
	Retained Earnings		17,160