Question

Be sure to read each transaction very carefully.

Skip a space between entries. Don't forget your description for each entry.

Remember, journal entries do not have $'s.

Need:

1) T-Accounts

2) Work Sheet

3) Income Statement

4) Balance Sheet

5) Post Closing Trial Balance

General Journal
					GENERAL JOURNAL
Date		Account Titles and Explanation					Debit	Credit
May	1	Rent Expense- Selling Space					2968
		Rent Expense- Office Space					742
			Cash					3710
		Paid May's rent
May	2	Accounts Receivable- Cole					6100
			Sales Revenue					6100
		Cost of Goods Sold					4100
			Merchandise Inventory					4100
		Merchandise Sales on credit

Answer 1

1) T accounts

Rent expense Account
Particulars	Debit Amount	Particulars	Credit Amount
To Opening Balance	-	By Transfer to P&L	3,710.00
To cash	3,710.00	By Closing balance	-
	3,710.00		3,710.00
Cash Account
Particulars	Debit Amount	Particulars	Credit Amount
To Opening Balance	-	By Rent expense	3,710.00
To Closing Balance	3,710.00	By Closing balance	-
	3,710.00		3,710.00
Accounts Receivable Account
Particulars	Debit Amount	Particulars	Credit Amount
To Opening Balance	-
To Sales	6,100.00	By Closing balance	6,100.00
	6,100.00		6,100.00
Sales Revenue Account
Particulars	Debit Amount	Particulars	Credit Amount
To Opening Balance	-	By Accounts Receivable	6,100.00
To Transfer to P&L	6,100.00
	6,100.00		6,100.00
Cost of Goods Sold Account
Particulars	Debit Amount	Particulars	Credit Amount
To Opening Balance	-	By Transfer to P&L	4,100.00
To Merchanside Inventory	4,100.00
	4,100.00		4,100.00
Inventory Account
Particulars	Debit Amount	Particulars	Credit Amount
To Opening Balance	-	By Cost of good sold	4,100.00
To Closing Balance	4,100.00
	4,100.00		4,100.00

Income Statement :

Particulars                                         Amount in $

Sales Revenue                                      6100

Less : Cost of Goods Sold                     (4100)

Operating Profit                                     2000

Less: Other expenses

Rent                                                     3710

Net Profit / (Loss)                                  (1710)

Balance Sheet

Particulars                                                Amount in $

Assets

Accounts Receivable                                    6100

Cash                                                            (3710)

Inventory                                                      (4100)

Total Assets                                                 (1710)

Liabilities

Reserves                                                    (1710)

Total                                                            (1710)

Note : To prepare correct balance sheet , require details about opening balances like opening balance of cash and inventory as they are appearing in negative at closing date.