Question

Chart of Accounts

Assets

111 Cash

112 Accounts Receivable

114 Prepaid Insurance

121 Land

122 Building

123 Accumulated Depreciation, Building

124 Pool/Slide Facility

125 Accumulated Depreciation, Pool/Slide Facility

126 Pool Furniture

127 Accumulated Depreciation, Pool Furniture

Liabilities

221 Accounts Payable

222 Wages Payable

223 Mortgage Payable

Owner's Equity

311 L. Judar, Capital

312 L. Judar, Drawing

313 Income Summary

Revenue

411 Income from Services

412 Concessions Income

Expenses

511 Pool Maintenance Expense

512 Wages Expense

513 Advertising Expense

514 Utilities Expense

515 Interest Expense

517 Insurance Expense

518 Depreciation Expense, Building

519 Depreciation Expense, Pool/Slide Facility

520 Depreciation Expense, Pool Furniture

522 Miscellaneous Expense

You are to record transactions in a two-column general journal. Assume that the fiscal period is

one month. You will then be able to complete all the steps in the accounting cycle.

When you are analyzing the transactions, think them through by visualizing the T accounts or by

writing them down on scratch paper. For unfamiliar types of transactions, specific instructions

for recording them are included. However, reason them out for yourself as well. Check off each

transaction as it is recorded.

July 1 Judar deposited $135,000 in a bank account for the purpose of buying Blast Off! The

business is a recreation area offering three large waterslides (called ?tubes?)?one

children's slide, an inner tube run, and a looping extreme slide.

2 Bought Blast Off! in its entirety for a total price of $540,800. The assets include pool

furniture, $3,800; the pool/slide facility (includes filter system, pools, pump, and slides),

$148,800; building, $96,200; and land, $292,000. Paid $120,000 down and signed a

mortgage note for the remainder.

2 Received and paid the bill for a one-year premium for insurance, $12,240.

2 Bought 125 inner tubes from Worn Tires for $1,225, paying $500 down, with the

remainder due in 20 days.

3 Signed a contract with a video game company to lease space for video games and to

provide a food concession. The rental income agreed upon is 10 percent of the revenues

generated from the machines and food, with the estimated monthly rental income paid in

advance. Received cash payment for July, $250.

5 Received bills totaling $1,320 for the grand opening/Fourth of July party. The bill from

Party Rentals for the promotional handouts, balloons, decorations, and prizes was $620,

and the newspaper advertising bills from the City Star were $700. (These expenses

should all be considered advertising expense.)

6 Signed a one-year contract for the pool maintenance with All-Around Maintenance and

paid the maintenance fee for July of $1,600.

6 Paid cash for employee picnic food and beverages, $128. (Debit Miscellaneous Expense.)

7 Received $12,086 in cash as income for the use of the facilities.

9 Bought parts for the filter system on account from Arlen's Pool Supply, $646. (Debit Pool

Maintenance Expense.)

14 Received $10,445 in cash as income for the use of the facilities.

15 Paid wages to employees for the period ended July 14, $9,460.

16 Paid cash as partial payment on account for promotional expenses recorded on July 5,

$1,150.

16 Judar withdrew cash for personal use, $2,500.

17 Bought additional pool furniture from Pool Suppliers for $2,100; payment due in 30 days.

18 Paid cash to seamstress for alterations and repairs to the character costumes, $328. (Debit

Miscellaneous Expense.)

21 Received $10,330 in cash as income for the use of the facilities.

21 Paid cash to Worn Tires as partial payment on account, $600.

23 Received a $225 reduction of our account from Pool Suppliers for lawn chairs received in

damaged condition.

25 Received and paid telephone bill, $292.

29 Paid wages for the period July 15 through 28 of $8,227.

31 Received $11,870 in cash as income for the use of the facilities.

31 Paid cash to Arlen's Pool Supply to apply on account, $360.

31 Received and paid water bill, $684.

31 Paid cash as an installment payment on the mortgage, $3,890. Of this amount, $1,910

represents a reduction in the principal and the remainder is interest.

31 Received and paid electric bill, $942.

31 Bought additional inner tubes from Worn Tires for $480, paying $100 down, with the

remainder due in 30 days.

31 Judar withdrew cash for personal use, $3,200.

31 Sales for the video and food concessions amounted to $4,840, and 10 percent of $4,840

equals $484. Because you have already recorded $250 as concessions income, record the

additional $234 revenue due from the concessionaire. (Cash was not received.)

Required

1. Journalize the transactions, starting on page 1 of the general journal.

2. Post the transactions to the ledger accounts.

3. Prepare a trial balance in the first two columns of the work sheet.

Check Figure

Trial balance total, $601,941

Answer 1

BLAST OFF
General journal for the month ending July 31
Date	Account Title	Debit	Credit
July.1	Cash	1350000
	L.Judar, Capital		135000
July.2	Pool Furniture	3800
	Pool/Slide facility	148800
	Building	96200
	Land	292000
	Cash		120000
	Mortgage Payable		420800
July.2	Prepaid Insurance	12240
	Cash		12240
July.3	Pool Furniture	1225
	Cash		500
	Accounts Payable		725
July.3	Cash	250
	Concessional income		250
July.5	Advertising Expense	1320
	Accounts Payable		1320
July.6	Pool Maintenance Expense	1600
	Cash		1600
July.6	Miscellaneous Expense	128
	Cash		128
July.7	Cash	12086
	Income from services		12086
July.9	Pool Maintenance Expense	646
	Accounts Payable		646
July.14	Cash	10445
	Income from services		10445
July.15	Wages Expense	9460
	Cash		9460
July.16	Accounts Payable	1150
	Cash		1150
July.16	L.Judar, Drawings	2500
	Cash		2500
July.17	Pool Furniture	2100
	Accounts Payable		2100
July.18	Miscellaneous Expense	328
	Cash		328
July.21	Cash	10330
	Income from services		10330
July.21	Accounts Payable	600
	Cash		600
July.23	Accounts Payable	225
	Pool Furniture		225
July.25	Utilities Expense	292
	Cash		292
July.29	Wages Expense	8227
	Cash		8227
July.31	Cash	11870
	Income from services		11870
July.31	Accounts Payable	360
	Cash		360
July.31	Utilities Expense	684
	Cash		684
July.31	Mortgage Payable	1910
	Interest Expense	1980
	Cash		3890
July.31	Utilities Expense	942
	Cash		942
July.31	Pool Furniture	480
	Cash		100
	Accounts Payable		380
July.31	L.Judar, Drawings	3200
	Cash		3200
July.31	AccountsReceivable	234
	Concessional income		234

Cash						Accounts Receivable
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
July.1	135000		135000			July.31	234		234
July.2		120000	15000						234
July.2		12240	2760						234
July.2		500	2260						234
July.3	250		2510
July.6		1600	910			Prepaid Insurance
July.6		128	782						Balance
July.7	12086		12868			Date	Debit	Creidt	Debit	Credit
July.14	10445		23313			July.2	12240		12240
July.15		9460	13853						12240
July.16		1150	12703
July.16		2500	10203			Building
July.18		328	9875						Balance
July.21	10330		20205			Date	Debit	Creidt	Debit	Credit
July.21		600	19605			July.2	96200		96200
July.25		292	19313						96200
July.29		8227	11086
July.31	11870		22956
July.31		360	22596
July.31		684	21912
July.31		3890	18022
July.31		942	17080			Land
July.31		100	16980						Balance
July.31		3200	13780			Date	Debit	Creidt	Debit	Credit
July.31			13780			July.2	292000		292000
						Pool / Slide Facility
									Balance
Accumulated Depreciation - Building						Date	Debit	Creidt	Debit	Credit
			Balance			July.2	148800		148800
Date	Debit	Creidt	Debit	Credit					148800
				0					148800
				0					148800
Acumulated Depreciation - Pool / Slide Facility						Pool furniture
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
				0		July.2	3800		3800
				0		July.2	1225		5025
				0		July.17	2100		7125
				0		July.23		225	6900
						July.31	480		7380
Acumulated Depreciation - Pool Furniture						Accounts Payable
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
				0		July.2		725		725
				0		July.5		1320		2045
				0		July.9		646		2691
				0		July.16	1150			1541
						July.17		2100		3641
						July.21	600			3041
						July.23	225			2816
						July.31	360			2456
Wages Payable						July.31		380		2836
			Balance
Date	Debit	Creidt	Debit	Credit		Mortgage Payable
				0					Balance
				0		Date	Debit	Creidt	Debit	Credit
				0		July.2		420800		420800
				0		July.31	1910			418890
L.Judar, Capital						L.Judar, Drawings
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
July.1		135000		135000		July.16	2500		2500
				135000		July.31	3200		5700
				135000					5700
				135000					5700
Income Summary						Income from services
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
				0		July.7		12086		12086
				0		July.14		10445		22531
				0		July.21		10330		32861
				0		July.31		11870		44731
Concession income						Pool Maintennce Expense
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
July.3		250		250		July.6	1600		1600
July.31		234		484		July.7	646		2246
				484					2246
				484					2246
Wages Expense						Advertising Expense
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
July.15	9460		9460			July.5	1320		1320
July.29	8227		17687						1320
			17687						1320
			17687						1320
Utilities Expense						Interest Expense
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
July.25	292		292			July.31	1980		1980
July.31	684		976						1980
July.31	942		1918						1980
			1918						1980
Insurance Expense						Depreciation Expense - Building
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
			0						0
			0						0
			0						0
			0						0
Depreciation Expense - Pool/Slide Facility						Depreciation Expense - Pool furniture
			Balance						Balance
Date	Debit	Creidt	Debit	Credit		Date	Debit	Creidt	Debit	Credit
			0						0
			0						0
			0						0
			0						0
Miscellaneous Expense
			Balance
Date	Debit	Creidt	Debit	Credit
July.6	128		128
July.18	328		456
			456
			456

BLAST OFF
Unadjusted Trial Balance as at July 31
Account Title	Debit	credit
Cash	13780
Accounts Receivable	234
Prepaid Insurance	12240
Land	292000
Building	96200
Acc.Depr. - Building
Pool/Slide Facility	148800
Acc.Depr. - Pool/Slide facility
Pool Furniture	7380
Acc. Dep - Pool Furniture
Accounts Payable		2836
Wages Payable
Mortgage Payable		418890
L.Judar, Capital		135000
L.Judar, Drawings	5700
Income from services		44731
Concessional income		484
Pool Maintenance Expense	2246
Wages Expense	17687
Advertising Expense	1320
Utilitiies Expense	1918
Interest Expense	1980
Miscellaneous Expense	456
Total	601941	601941