Question

Section C: Long Question (SK2:15 marks - 1 x 15 marks) C1 - Transactions of Star Company for the month of January 2019 are presented below: 1. On January 1, 2019, the owner invested $75,000 cash in the business. 2. Purchased equipment for $35,000 cash. 3. Purchased supplies on account for $8,000. 4. Received a bill for $1,250 for advertising of the current month. 5. Provided $17,500 of programming services for customers. Star company received cash of $7,500 from customers, and billed the customers with the remaining amount. 6. Paid the following January expenses in cash: salaries $4,500, rent $3,000, and utilities $1,000. 7. Paid its $1,250 advertising bill in cash. 8. The owner withdrew $6,500 in cash from the business for his personal use. Required: 1- Prepare journal entries to record the above transactions. (5 marks) 2- Post to the appropriate ledger accounts. (5 marks) 3- Prepare the trial balance of Star Company on January 31, 2019. (5 marks)

Answer 1

Date Credit Нsbво 2 35 000 Journal Entries - Journal Ertries Debit Cash $75000 owner's Equity cowner invested $75000 in the company) Equipment 35 000 Cash (Purchased $35000 equipment in cash) Supplies 'Accounts loyable (Purchased supplies on account) Advertising Expenses Accounts Payable (Received a bill for advertising) 8000 8000 1250 14500 10000 Cash Accounts Receivables Programming services 14500 ( (Provided programming servius Salaries Expense Reat Expense Wilities Expense 4500 3000 1000 18500 cash the salary, Rent or (paid 1250 Payable 1250 Accoeats - (paid Cash adva 6500 6500 Drawing cash

Uolger Accounts To Debit Cash bil Gede 1500 1500 35000 Balounce 8500 1250 (500 31250 owner's squiry Debil Gede 15000 Balance 5000 Equipment Credit 35000 Balance 3 5000 - Supplies Debit (3) Credit 8000 Brelance 8000 Accocents Payable Debit Greeldt 1250 (3) 1000 1250 Balance соо о

Advertising Expenses To Debit 12.50 Balance 1250 Accounts Receivables (5) Debit Creolit 10000 Balanc 10000 Programming services Debit Crealit 17500 Balanu 17500 Saleery Gepenses Defit Creeldt 4500 Balance usoo

Rent bepenses - Debit Greelit (6) 3000 Balance 3000 - utility Gepeones Debit eredit Beleence Tooo Drawing Debit Ged 6500 Balence 6500 Trial Balance on January 31, 2019 Credit Debit 312.50 Cash 175000 135000 8000 18000 owend's Equity equipment supplies Accocents Payable Advertising Gapenses Accoleats Receivable programming services Salery 1250 10000 117500 4500 3000 1000 Reato Citility 16500 TOO 500 100500 Drauolla