Question

PR 2-2A Journal entries and trial balance Obj. 1, 2, 3,4 VA. 56770 O October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month a. Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $40,000. b. Paid rent on office and equipment for the month, $4,800 c. Purchased supplies on account, $2,150 d. Paid creditor on account, $1,100. e. Earned sales commissions, receiving cash, $18,750. t. Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $800. g. Paid office salaries, $3,500. h. Determined that the cost of supplies used was $1,300. i. Paid dividends,$1,500. OW ME NOW EXCEL TEMPLATE Paid Instructions 1. Journalize entries for transactions (a) through (), using the following account titles: Cash, Sup- plies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter 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

Answer 1

1 Journal entries : Date Debit $ Credit $ Accounts Titles Cash Common stock 40000 400001 4800 Rent on office & equipment Cash 48000 21501 Supplies Accounts Payable 21501 1100 Accounts Payable Cash 11001 18750 Cash Sales commission 18750 Automobile expense Miscel. expense Cash 1580 800) 23801

3500 Office Salaries Cash 3500 1300 Supplies expense Supplies 13001 1500 Dividend expense Cash 1500

2) T-Accounts: DEBIT Common stock Sales Commission CASH ACCOUNT JAMOUNT $ CREDIT AMOUNT $ 40000 Rent on Off. & Eq. 4800 18750 AP 1100 Auto expen. 1580 Miscel exp. 8001 salary 3500 dividend 1500 CLOSING BALANCE 454701 COMMON STOCK ACCOUNT Cash 40000 RENT ON OFFICE & EQUIP. ACCOUNT 4800 Cash АР SUPPLIES ACCOUNT 2150 Supplies expense CLOSING BALANCE 1300 850

AP ACCOUNT 1100 Supplies 1050 Cash CLOSING BALANCE 2150 SALES COMMISSION ACCOUNT Cash 187501 AUTOMOBILE EXPENSE ACCOUNT 15801 Cash MISCEL. ACCOUNT 800 Cash OFFICE SALARY ACCOUNT 3500 Cash SUPPLIES EXPENSE ACCOUNT 1300|| Supplies DIVIDEND EXPENSE ACCOUNT 1500 Cash

3) Adjusted Trial Balance : Credit $ 45470|| 40000 4800 850 1050 Account Titles Debit $ Cash Common Stock Rent on Office & Equip Supplies Accounts Payable Sales Commissions Automobile expense miscel expense Office Salary Supplies expense Divided expense TOTAL 18750 1580 8001 35001 1300 1500 59800 598001 4) a. Total Revenue recorded = $18750 b. Total Expense recorded = $13480 (ie. 1580+800+3500+1300+1500) c. Amount of Net Income = 18750 - 13480 = $5270 5) Increase in Retained Earnings by $5270