Question

Journal Entries and Trial Balance

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business.

June	1.	Kris transferred cash from a personal bank account to an account to be used for the business, $24,900.
	4.	Paid rent for period of June 4 to end of month, $2,420.
	6.	Purchased a truck for $21,000, paying $2,000 cash and giving a note payable for the remainder.
	8.	Purchased equipment on account, $9,710.
	10.	Purchased supplies for cash, $1,670.
	12.	Paid annual premiums on property and casualty insurance, $3,740.
	15.	Received cash for job completed, $10,460.

Enter the following transactions on Page 2 of the two-column journal.

	23.	Paid creditor a portion of the amount owed for equipment purchased on June 13, $3,460.
	24.	Recorded jobs completed on account and sent invoices to customers, $11,900.
	25.	Received an invoice for truck expenses, to be paid in July, $1,100.
	26.	Paid utilities expense, $1,250.
	27.	Paid miscellaneous expenses, $450.
	28.	Received cash from customers on account, $4,980.
	29.	Paid wages of employees, $3,310.
	30.	Withdrew cash for personal use, $2,760.

Required:

1. Journalize each transaction in a two-column journal, beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. For a compound transaction, if an amount box does not require an entry, leave it blank.

11 Cash	31 Kris Storey, Capital
12 Accounts Receivable	32 Kris Storey, Drawing
13 Supplies	41 Fees Earned
14 Prepaid Insurance	51 Wages Expense
16 Equipment	53 Rent Expense
18 Truck	54 Utilities Expense
21 Notes Payable	55 Truck Expense
22 Accounts Payable	59 Miscellaneous Expense

General Journal				Page 1
Date	Description	Post. Ref.	Debit	Credit
2019
June 1
June 4
June 6
June 8
June 10
June 12
June 15

General Journal				Page 2
Date	Description	Post. Ref.	Debit	Credit
2019
June 23
June 24
June 25
June 26
June 27
June 28
June 29
June 30

2. Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in the general journal as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. If an amount box does not require an entry, leave it blank.

General Ledger
Account	Cash				ACCOUNT NO.	11
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 1
June 4
June 6
June 10
June 12
June 15
June 23
June 26
June 27
June 28
June 29
June 30

Account	Accounts Receivable				ACCOUNT NO.	12
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 24
June 28

Account	Supplies				ACCOUNT NO.	13
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 10

Account	Prepaid Insurance				ACCOUNT NO.	14
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 12

Account	Equipment				ACCOUNT NO.	16
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 8

Account	Truck				ACCOUNT NO.	18
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 6

Account	Notes Payable				ACCOUNT NO.	21
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 6

Account	Accounts Payable				ACCOUNT NO.	22
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 8
June 23
June 25

Account	Kris Storey, Capital				ACCOUNT NO.	31
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 1

Account	Kris Storey, Drawing				ACCOUNT NO.	32
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 30

Account	Fees Earned				ACCOUNT NO.	41
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 15
June 24

Account	Wages Expense				ACCOUNT NO.	51
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 29

Account	Rent Expense				ACCOUNT NO.	53
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 4

Account	Utilities Expense				ACCOUNT NO.	54
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 26

Account	Truck Expense				ACCOUNT NO.	55
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 25

Account	Miscellaneous Expense				ACCOUNT NO.	59
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 27

3. Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 2019. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example.

Eco-Centric Designs Unadjusted Trial Balance June 30, 2019
	Debit Balances	Credit Balances
Cash
Accounts Receivable
Totals

4. Determine the excess of revenues over expenses for June.
$

5. Can you think of any reason why the amount determined in (4) might not be the net income for June?

Fees earned includes some fees earned in the month of June that have not been received.

Utilities expense includes expenses incurred for the month of June than have not yet been paid

Some supplies may have been used during June but no supplies expense has been recorded.

Additions to capital has been wrongly recorded as drawings.

Answer 1