Question

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, $30,000.
	2	Paid rent on office and equipment for the month, $2,450.
	3	Purchased supplies on account, $2,200.
	4	Paid creditor on account, $850.
	5	Earned fees, receiving cash, $14,940.
	6	Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $470.
	7	Paid office salaries, $2,000.
	8	Determined that the cost of supplies used was $1,100.
	9	Withdrew cash for personal use, $3,200.

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.

X

Chart of Accounts

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

X

Journal

Answer 1

Req. 1 Debit Date Account Title Credit January 1 Cash Capital SM (To record the cash invested in buisness) $30,000 $30,000 2 Rent Expense $2,450 $2,450 Cash (To record the rent expense) 3 Supplies Accounts payable (To record the purchase of supplies) $2,200 $2,200 4 Accounts payable $850 Cash $850 (To record payment to creditors) 5 Cash $14,940 Fees earned $14,940 (To record the fees earned)

6 Automobile expense Miscellaneous expense S1,580 $470 S2,050 Cash (To record the expenses) 7 Office salaries expense S2,000 Cash S2,000 (To record the payment of salaries) 8 Supplies expense Suplies (To record the office supplies expense) S1,100 S1,100 9 SM-Drawing $3,200 Cash $3,200 (To record the drawings) Req. 2 Prepare T-accounts as follows:

Cash Date Jan. 1 Jan. 5 Amount Date Amount $30,000 |Jan. 2 $14,940 |Jan. 4 Jan. 6 Jan. 7 Jan. 9 $34,390 S2,450 $850 $2,050 $2,000 S3,200 End. Bal. Supplies Date Date Jan. 3 Amount Amount $2,200 Jan. 8 S1,100 End. Bal. $1,100 Accounts payable Amount Date Amount Date Jan 4 $850 Jan. 3 $2,200 End. Bal. S1,350

Fees earned Date Jan. 5 Date Amount Amount $14,940 End. Bal. S14,940 SM, capital Date Amount Amount S30,000 Date Jan. 1 End. Bal. $30,000 Rent Expense Date Amount Date Amount Jan. 2 $2,450 End. Bal. $2,450 Miscellaneous Expense Amount Date Date Amount Jan. 6 $470 End. Bal. $470

Automobile Expense Amount Date Date Amount Jan. 6 $1,580 End. Bal. S1,580 Supplies expense Date Jan. 8 Amount Date Amount $1,100 End. Bal. $1,100 Office salaries expense Amount Date Amount Date Jan. 7 $2,000 End. Bal. $2,000 SM, Drawing Date Date Jan. 9 Amount Amount $3,200 End. Bal. $3,200

Req. 3 Prepare an unadjusted trial balance Unadjusted Trial balance Debit Credit Cash $34,390 Supllies Accounts payable SM, capital Fees earned SM, Drawings Rent Expense Automobile Expense Miscellaneous Expense Office salaries Expense Supplies Expense Total $1,100 $1,350 $30,000 $14,940 $3,200 $2,450 $1,580 $470 $2,000 $1,100 $46,290 $46,290 Req. 4

Total revenue: Fees earned $14,940 a Expenses: Rent Expense Automobile Expense Miscellaneous Expense Office salaries Expense Supplies Expense Total expenses $2,450 $1,580 $470 $2,000 $1,100 b S7,600 Net Income (a-b) $7,340 Req. 5 Compute the increase or decrease in owner's equity for the month as follows: Increase/decrease in owner's equity = Cash invested + Net Income - Drawings = $30,000 + $7,340 - $3,200 = $34,140