Question

Journalizing and Posting Transactions Instructions Chart Of Accounts General Journal T-Accounts Instructions Findlay Testing Inc. provides water testing and maintenance services for owners of hot tubs and swimming pools. During September the following transactions occurred: September Transactions: Sept. 1 2 5 8 13 18 Issued common stock for $20,000. Purchased chemical supplies for $1,880 cash. Paid office rent for October, November, and December, the rent is $800 per month Purchased $1,290 of advertising for September on account. Billed the city of Bellefontaine $2,100 for testing the water in the city's outdoor pools during September Received $8,250 from Alexander Blanchard upon completion of overhaul of his swimming pool water circulation system Since the job was completed and collected for on the same day, no bill was sent to Blanchard. Received $835 from the city of Bellefontaine for water testing that was previously billed. Paid $3,970 to hourly employees for work performed in September. 25 30 Required: 1. Prepare a journal entry for each transaction 2. Post the journal ontries to the appropriate accounts

Answer 1

In the first question we pass journal entries following the golden rules of accounts by identifying the nature of the transactions.
1 of Findlay - Journal Particulars Date : Inc Debit - Testing No Date Credit Sept 1 $20,000 $20,000 cash Book al or To common stock old (Reing cash received for issuing shares) Sept 2 $1880 Purchase ale Dr . TO cash all CBeing eely for cash purchases $1880 Sept 5 $QH00 Office rent al Dr TO cash / Bank ale Coffice rent paid for 3 months $800 each ie 824oo)

91290 $1290 SepteAdvertisment expense ale or To creditor for advertising all (Being entry passed for credit purchasing of services) $ 2100 Sept 13 $2100 city of Bellefontaine all or - C Debtor) TO sale of services alc (Boing entry passed for credit sale )

la HB24 No. Date : 1 Sept 18 $ 8250 $8250 Cash I Bank al or TO sale of services being entry possed for cash sales) 13835 $835 Septas Cash I Bank ale or To city of Bellefontaine al CBeing cash received for predit sale passed on Sept. sept30 $3970 $3970 soto w ages Isalaries alc or To cash / Bank all (Being wages (salaries for the month of september provided)

In the second question we create 3 ledger accounts to record the transactions (no need to pass journal entries) i.e Trading profit and loss account , debtors account and creditors account. By posting all the transactions in the relevant ledgers we shall obtain all the answers asked in the question.However for Supplies used during the year we follow the formula of COGS i.e Opening stock + purchases - closing stock.

No. Date : 1 In the Books of Carrico Advertising Inc - Trading Profit & Loss All Particulars $ Particulacs to Opening Stocks Csupplies Be Sales Ccredit) 13390 to purchases ccredit) al 14600 By Closing stock $ : 16816! in hand) 2230 --- To Gross profit old (660340 - 688330 437600 By Gross profit old 1126500 96240 To Operating expenses to interest expenses To Net Profit 6600 Ican30 660340

Customers Debtors Al 70870 Particulars $ particulars To Bal Bld | 45,800 By cash alo To Seles Advertisment services provided) 686.100 I By Bal dd 2320 731900 731900 - Suppliers Alc (Creditors) Particulars Particulass To cash als 19300 By Bal Bid By purchases alc 8150 4600 To Bal old (3430) 122750 22750

u Carrico's 2019 income before taxes $ 96240

No. Date : 1 0 Ending Balance of Accounts receivable $ 23200 Supplies used = Opening Supplies + purchas - Closing supplies $_13390 + $14600 - $22.30 = $25760 Fodina - Balance of accounts payable. $3430