Question

Roth Contractors Corporation was incorporated on December 1, 2019 and had the following transactions during December:

Part A a. Issued common stock for $5,000 cash

b. Paid $1,200 cash for three months’ rent: December 2019; January and February 2020

c. Purchased a used truck for $10,000 on credit (recorded as an account payable)

d. Purchased $1,000 of supplies on credit. These are expected to be used during the month (recorded as expense)

e. Paid $1,800 for a one-year truck insurance policy, effective December 1

f. Billed a customer $4,500 for work completed to date

g. Collected $800 for work completed to date

h. Paid the following expenses in cash: advertising, $350; interest, $100; telephone, $75; truck operating, $425; wages, $2,500

i. Collected $2,000 of the amount billed in f above

j. Billed customers $6,500 for work completed to date

k. Signed a $9,000 contract for work to be performed in January 2020

l. Paid the following expenses in cash: advertising, $200; interest, $150; truck operating, $375; wages, $2,500

m. Collected a $2,000 advance on work to be done in January (the policy of the corporation is to record such advances as revenue at the time they are received)

n. Received a bill for $100 for electricity used during the month (recorded as utilities expense). Required:

1. Open general ledger T-accounts for the following: Cash, Accounts Receivable, Prepaid Insurance, Prepaid Rent, Truck, Accounts Payable, Common Stock, Repair Revenue, Advertising Expense, Interest Expense, Supplies Expense, Telephone Expense, Truck Operating Expense, Utilities Expense, and Wages Expense. General ledger account numbers are not necessary. 2. Prepare journal entries to record the December transactions. General ledger account numbers and description

Answer 1

In the books of Roth Contractors Corporation

General Journal (for the month of December 2019)

Date	Particulars	LF	Dr. (in $)	Cr. (in $)
1.	Cash A/C                                                              Dr.               To Common Stock A/C      (Being common stock issued)		5,000	5,000
2.	Rent A/C                                                               Dr. Prepaid Rent A/C                                                   Dr.               To Cash A/C      (Being Rent paid 400 for the month of December and 800 in advance for the month of Jan and Feb)		400 800	1,200
3.	Truck A/C                                                             Dr.               To Account payable A/C      (BeingTruck/vehicles purchased on credit)		10,000	10,000
4.	Purchase/supply expense A/C                                Dr.               To Accounts payable A/C      (Being Goods purchased on credit)		1,000	1,000
5.	Prepaid insurance A/C                                            Dr. Insurance A/C                                                       Dr.                    T0 Cash A/C                                    (Being Insurance policy purchased)		1,650 150	1,800
6.	Account Receivable A/C                                        Dr.                 To Repair Revenue A/C (Being Revenue earned)		4,500	4,500
7.	Cash A/C                                                             Dr.                 To Repair Revenue A/C (Being Revenue earned)		800	800
8.	Advertising A/C                                                      Dr. Interest expense A/C                                           Dr. Telephone operating expense A/C                     Dr. Truck expense A/C                                                Dr. Wages A/C                    To Cash A/C (Being Expenses paid in cash)		350 100 75 425 2500	3450
9.	Cash A/C                                                               Dr.                 To Account receivable A/C (Being Revenue earned)		2,000	2,000
10.	Account Receivable A/C                                        Dr.                 To Repair Revenue A/C (Being Revenue earned)		6,500	6,500
11.	No entry
12.	Advertising A/C                                                  Dr. Interest expense A/C                                        Dr. Truck operating expenses A/C                         Dr. Wages A/C                    To Cash A/C (Being Expenses paid in cash)		200 150 375 2,500	3,225
13.	Cash A/C                                                               Dr.                    To Unearned Revenue (Being revenue received in advance)		2,000	2,000
14.	Utility bills A/C                                                        Dr.                    To Accounts payable (Being Utility bills received)		100	100

Required Ledger Accounts:

Cash Account

Particulars	Amt (in $)	Particulars	Amt (in $)
To common stock To revenue To account receivable To unearned Revenue	5,000 800 2,000 2,000	By Rent By prepaid Rent By Prepaid insurance By insurance By advertising By interest expense By telephone expense By truck operating expense By wages account By advertising By interest expense By truck operating expense By wages By Bal. c/d	400 800 1,650 150 350 100 75 450 2,500 200 150 375 2,500 100
	9,800		9800

Account Receivables

Particulars	Amt (in $)	Particulars	Amt (in $)
To revenue To revenue	4,500 6,500	By Cash By bal. c/d	2,000 9,000
	11,000		11,000

Prepaid insurance

Particulars	Amt (in $)	Particulars	Amt (in $)
To cash	1,650	By bal. c/d	1,650
	1,650		1,650

Prepaid Rent

Particulars	Amt (in $)	Particulars	Amt (in $)
To cash	800	By bal. c/d	800
	800		800

Truck Account

Particulars	Amt (in $)	Particulars	Amt (in $)
To Accounts payables	10,000	By bal. c/d	10,000
	10,000		10,000

Accounts payables

Particulars	Amt (in $)	Particulars	Amt (in $)
To bal. c/d	10,100	By Truck By utilities bills	10,000 100
	10,100		10,100

Common stock account

Particulars	Amt (in $)	Particulars	Amt (in $)
To bal. c/d	5,000	By Cash	5,000
	5000		5000

Repair Revenue account

Particulars	Amt (in $)	Particulars	Amt (in $)
To bal. c/d	11,800	By account receivable By cash By account receivanles	4,500 800 6,500
	11,800		11,800

Truck operating expense Account

Particulars	Amt (in $)	Particulars	Amt (in $)
To Cash To cash	450 375	By bal. c/d	825
	825		825

Utilities expense Account

Particulars	Amt (in $)	Particulars	Amt (in $)
To account Payables	100	By bal. c/d	100
	100		100

Wages Account

Particulars	Amt (in $)	Particulars	Amt (in $)
To cash To cash	2,500 2,500	By bal. c/d	5,000
	5,000		5,000