Question

Ann Simpson started her practice as a design consultant on September 1, 2018. During the first month of operations, the business completed the following transactions: Sep. 1 Received 548,000 cash and issued common stock to Simpson. Purchased office supplies, $1,200, and furniture, 51,300, on account. 6 Performed services for a law firm and received $1,900 cash. 7 Paid $18,000 cash to acquire land to be used in operations. 10 Performed services for a hotel and received its promise to pay the $1,200 within one week. 14 Paid for the furniture purchased on September 4 on account. Paid assistant's semimonthly salary, 51,500. 17 Received cash on account, $1,000. 20 Prepared a design for a school on account, $650. 25 Received $2,100 cash for design services to be performed in October. 28 Received $2,900 cash for consulting with Plummer & Gordon. Paid 5600 cash for a 12-month insurance policy starting on October 1. Paid assistant's semimonthly salary. $1,500. 30 Paid monthly rent expense, $600. 30 Received a bill for utilities, $350. The bill will be paid next month. 30 Paid cash dividends of $3,700. Requirements 1. Record each transaction in the journal using the following account titles: Cash Accounts Receivable: Office Supplies, Prepaid Insurance; Land; Furniture; Accounts Payable; Utilities Payable; Unearned Revenue; Common Stock Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required. 2. Open a T-account for each of the accounts. 3. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal. 4. Prepare the trial balance of Ann Simpson, Designer, as of September 30, 2018

Answer 1

Requirement 1:

Date	Account title and Explanation	Debit	Credit
Sept.1	Cash	$48,000
	Common stock		$48,000
	[To record issuance of common stock]
Sept.4	Office Supplies	$1,200
	Furniture	$1,300
	Accounts payable		$2,500
	[To record purchase of supplies and furniture on account]
Sept.6	Cash	$1,900
	Service revenue		$1,900
	[To record cash received for services]
Sept.7	Land	$18,000
	Cash		$18,000
	[To record purchased land for cash]
Sept.10	Accounts receivable	$1,200
	Service revenue		$1,200
	[To record services performed on account]
Sept.14	Accounts payable	$1,300
	Cash		$1,300
	[To record paid for accounts payable]
Sept.15	Salaries expense	$1,500
	Cash		$1,500
	[To record payment of salaries]
Sept.17	Cash	$1,000
	Accounts receivable		$1,000
	[To record cash received from customers]
Sept.20	Accounts receivable	$650
	Service revenue		$650
	[To record services performed on account]
Sept.25	Cash	$2,100
	Unearned revenue		$2,100
	[To record advance received from customers]
Sept.28	Cash	$2,900
	Service revenue		$2,900
	[To record cash received for services]
Sept.29	Prepaid insurance	$600
	Cash		$600
	[To record cash paid in advance for insurance]
Sept.30	Salaries expense	$1,500
	Cash		$1,500
	[To record payment of salaires]
Sept.30	Rent expense	$600
	Cash		$600
	[To record payment of rent]
Sept.30	Utilities expense	$350
	Utilities payable		$350
	[To record accrued utilities expense]
Sept.30	Cash dividends	$3,700
	Cash		$3,700
	[To record payment of cash dividends]

Requirement 2&3:

Cash				Common stock
Sept.1	$48,000	Sept.7	$18,000			Sept.1	$48,000
Sept.6	$1,900	Sept.14	$1,300			Bal.	$48,000
Sept.17	$1,000	Sept.15	$1,500
Sept.25	$2,100	Sept.29	$600	Dividends
Sept.28	$2,900	Sept.30	$1,500	Sept.30	$3,700
		Sept.30	$600	Bal.	$3,700
		Sept.30	$3,700
Bal.	$28,700			Service revenue
						Sept.6	$1,900
Accounts receivable						Sept.10	$1,200
Sept.10	$1,200	Sept.17	$1,000			Sept.20	$650
Sept.20	$650					Sept.28	$2,900
Bal.	$850					Bal.	$6,650
Office supplies				Salaries expense
Sept.4	$1,200			Sept.15	$1,500
Bal.	$1,200			Sept.30	$1,500
				Bal.	$3,000
Prepaid insurance
Sept.29	$600			Rent expense
Bal.	$600			Sept.30	$600
				Bal.	$600
Land
Sept.7	$18,000			Utilities expense
Bal.	$18,000			Sept.30	$350
				Bal.	$350
Furniture
Sept.4	$1,300
Bal.	$1,300
Accounts payable
Sept.14	$1,300	Sept.4	$2,500
		Bal.	$1,200
Utilities payable
		Sept.30	$350
		Bal.	$350
Unearned Revenue
		Sept.25	$2,100
		Bal.	$2,100

Requirement 4:

Unadjusted Trial Balance
Account title	Debit	Credit
Cash	$28,700
Accounts receivable	$850
Office supplies	$1,200
Prepaid insurance	$600
Land	$18,000
Furniture	$1,300
Accounts payable		$1,200
Utilities payable		$350
Unearned Revenue		$2,100
Common stock		$48,000
Dividends	$3,700
Service revenue		$6,650
Salaries expense	$3,000
Rent expense	$600
Utilities expense	$350
Total	$58,300	$58,300