Question

CHART OF ACCOUNTS
Tri-City Realty
General Ledger
ASSETS 11 Cash 12 Supplies LIABILITIES 21 Accounts Payable EQUITY 31 Sharon Matthews, Capital 32 Sharon Matthews, Drawing	REVENUE 41 Fees Earned EXPENSES 51 Rent Expense 52 Office Salaries Expense 53 Automobile Expense 54 Supplies Expense 55 Miscellaneous Expense

On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month:

Jan.	1	Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $29,000.
	2	Paid rent on office and equipment for the month, $2,350.
	3	Purchased supplies on account, $2,250.
	4	Paid creditor on account, $800.
	5	Earned fees, receiving cash, $14,640.
	6	Paid automobile expenses (including rental charge) for month, $1,520, and miscellaneous expenses, $890.
	7	Paid office salaries, $2,000.
	8	Determined that the cost of supplies used was $1,100.
	9	Withdrew cash for personal use, $2,600.

Required:

1.	Journalize entries for transactions Jan. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles.
2.	Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance.
3.	Prepare an unadjusted trial balance as of January 31, 2019.
4.	Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for January.
5.	Determine the increase or decrease in owner’s equity for January.

Answer 1

Requirement 1:

Date	Account title and explanation	Debit	Credit
Jan 1	Cash	$29,000
	Sharon Matthews, Capital		$29,000
	[To record initial investment]
Jan 2	Rent expense	$2,350
	Cash		$2,350
	[To record payment of rent]
Jan 3	Supplies	$2,250
	Accounts payable		$2,250
	[To record purchase of supplies on account]
Jan 4	Accounts payable	$800
	Cash		$800
	[To record paid creditors]
Jan 5	Cash	$14,640
	Fees Earned		$14,640
	[To record fees earned]
Jan 6	Automobile expense	$1,520
	Miscellaneous expense	$890
	Cash		$2,410
	[To record automobile expense and Misc. Expense]
Jan 7	Office salaries expense	$2,000
	Cash		$2,000
	[To record office salaries expense]
Jan 8	Supplies expense [2,2250-1,100]	$1,150
	Supplies		$1,150
	[To record supplies expense]
Jan 9	Sharon Matthews, Drawing	$2,600
	Cash		$2,600
	[To record withdrawal of cash]

Requirement 2:

Cash					Fees Earned
Jan 1	$29,000	Jan 2	$2,350				Jan 5	$14,640
Jan 5	$14,640	Jan 4	$800				Bal.	$14,640
		Jan 6	$2,410
		Jan 7	$2,000		Rent expense
		Jan 9	$2,600		Jan 2	$2,350
Bal.	$33,480				Bal.	$2,350
Supplies					Office salaries expense
Jan 3	$2,250	Jan 8	$1,150		Jan 7	$2,000
Bal.	$1,100				Bal.	$2,000
Accounts payable					Automobile expense
Jan 4	$800	Jan 3	$2,250		Jan 6	$1,520
		Bal.	$1,450		Bal.	$1,520
Sharon Matthews, Capital					Supplies expense
		Jan 1	$29,000		Jan 8	$1,150
		Bal.	$29,000		Bal.	$1,150
Sharon Matthews, Drawing					Miscellaneous expense
Jan 9	$2,600				Jan 6	$890
Bal.	$2,600				Bal.	$890

Requirement 3:

Tri-City Realty
Unadjusted Trial balance
For the month ended January 31,2019
Cash	$33,480
Supplies	$1,100
Accounts payable		$1,450
Sharon Matthews, Capital		$29,000
Sharon Matthews, Drawing	$2,600
Fees Earned		$14,640
Rent expense	$2,350
Office salaries expense	$2,000
Automobile expense	$1,520
Supplies expense	$1,150
Miscellaneous expense	$890
Total	$45,090	$45,090

Requirement 4:

a	Revenues:
	Fees Earned	$14,640
	Total Revenues		$14,640
b	Expenses:
	Rent expense	$2,350
	Office salaries expense	$2,000
	Automobile expense	$1,520
	Supplies expense	$1,150
	Miscellaneous expense	$890
	Total Expenses		$7,910
c	Net income (a-b)		$6,730

Requirement 5:

Increase in owner's equity = Net income - drawings = $6,730-2,600 = $4,130