Question

On October 1, 2018, Jay Crowley established Affordable Realty, which completed the following transactions during the month:

1. Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for Common Stock, $29,000.
2. Paid rent on office and equipment for the month, $5,360.
3. Purchased supplies on account, $1,580.
4. Paid creditor on account, $580.
5. Earned sales commissions, receiving cash, $24,360.
6. Paid automobile expenses (including rental charge) for month, $1,490, and miscellaneous expenses, $1000.
7. Paid office salaries, $3,120.
8. Determined that the cost of supplies used was $880.
9. Paid dividends, $1,440.

Required:

1. Journalize entries for transactions (a) through (i) (in chronological order), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. For a compound transaction, if an amount box does not require an entry, leave it blank.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to these T accounts, selecting the appropriate letter to the left of each amount to identify the transactions. Determine the account balances of the T accounts (when required), after all posting is complete. Accounts containing a single entry only (such as Common Stock) do not need a balance.

3. Prepare an unadjusted trial balance as of October 31, 2018. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. For those boxes in which no entry is required, leave the box blank.

4. As a result of the January transactions (a-i), 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 October.

5. Determine the increase or decrease in retained earnings for October.

Jomar Entries and nar Balance On October 1, 2018, 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, $29,000 b. Paid rent on office and equipment for the month, $5,360. c. Purchased supplies on account, $1,580. d. Paid creditor on account, $580. e. Earned sales commissions, receiving cash, $24,360. f. Paid automobile expenses (including rental charge) for month, $1,490, and miscellaneous expenses, $1000. 9. Paid office salaries, $3,120. h. Determined that the cost of supplies used was $880. 1. Paid dividends, $1,440. Required: 1. Journalize entries for transactions (a) through ( (in chronological order), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. For a compound transaction, if an amount box does not require an entry, leave it blank. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these T

Answer 1

1.

No.	Account Title and Explanation	Debit	Credit
a	Cash	29,000
	Common stock		29,000
b	Rent expense	5,360
	Cash		5,360
c	Supplies	1,580
	Accounts payable		1,580
d	Accounts payable	580
	Cash		580
e	Cash	24,360
	Sales commission		24,360
f	Automobile expense	1,490
	Miscellaneous expense	1,000
	Cash		2,490
g	Office salaries expense	3,120
	Cash		3,120
h	Supplies expense	880
	Supplies		880
i	Dividends	1,440
	Cash		1,440

2.

Cash 29,000 b 24,360 d 5,360 580 2,490 3,120 1,440 Jog - Bal. 40,370 Supplies | 1,580 h 700 880 Bal. d Accounts payable 580 C 1 Bal. ,580 1,000 Common stock a 29,000 Dividend Dividends 1,440 Sales commissions le 24,360 Rent expense 5,360

Office salaries expense 3,120 f Automobile expense 1,490 Supplies expense 880 h Miscellaneous expense 1,000

3.

Credit 1,000 29,000 Trial balance Account Debit Cash 40,370 Supplies 700 Accounts payable Common stock Dividends 1,440 Sales commissions Rent expense 5,360 Office salaries expense 3,120 Automobile expense 1,490 Supplies expense 880 Miscellaneous expense 1,000 54,360 24,360 Total 54,360

4.

a. Total revenues = 24,360 b. Total expenses = 5,360+3,120+1,490+880+1,000 = 11,850 c. Net income = 24,360- 11,850 = 12,510

5.

Retained earnings = 12,510 - 1,440 = 11,070

Retained earnings increased by $11,070