Question

Denzel Brooks opened a Web consulting business called Venture Consultants and completed the following transactions in March March 1 Brooks invested $190,000 cash along with $30,000 in office equipment in the company in exchange for common stock. 2 The company prepaid $6,500 cash for six months' rent for an office. Mint: Debit Prepaid Rent for $6,500. 3 The company made credit purchases of office equipment for $4,000 and office supplies for $2,400. Payment is due within 10 days. 6 The company completed services for a client and immediately received $5,500 cash. The company completed a $11,400 project for a client, who must pay within 30 days. 12 The company paid $6,400 cash to settle the account payable created on March 3. 19 The company paid $7,100 cash for the premium on a 12-month insurance policy. Wint: Debit Prepaid Insurance for $7,100. 22 The company received $3,600 cash as partial payment for the work completed on March 9. 25 The company completed work for another client for $4,150 on credit. 29 The company paid a $6,400 cash dividend. 30 The company purchased $800 of additional office supplies on credit 31 The company paid $1,300 cash for this month's utility bill. Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101): Accounts Receivable (106): Office Supplies (124): Prepaid Insurance (128); Prepaid Rent (131): Office Equipment (163): Accounts Payable (201): Common Stock (307): Dividends (319): Services Revenue (403) and Utilities Expense (690). 2. Post the journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of the end of March

Answer 1

Solution:

1. Journal Entries:

Date	Particulars	Ref	Debit	Credit
Mar-01	Cash	101	190000
	Office equipment	163	30000
	Common Stock	307		220000
Mar-02	Prepaid Rent	131	6500
	Cash	101		6500
Mar-03	Office Equipment	163	4000
	Office Supplies	124	2400
	Accounts payable	201		6400
Mar-06	Cash	101	5500
	Services Revenue	403		5500
Mar-09	Accounts Receivable	106	11400
	Services Revenue	403		11400
Mar-12	Accounts payable	201	6400
	Cash	101		6400
Mar-19	Prepaid Insurance	128	7100
	Cash	101		7100
Mar-22	Cash	101	3600
	Accounts Receivable	106		3600
Mar-25	Accounts Receivable	106	4150
	Services Revenue	403		4150
Mar-29	Dividends	319	6400
	Cash	101		6400
Mar-30	Office supplies	124	800
	Accounts payable	201		800
Mar-31	Utilities Expense	690	1300
	Cash	101		1300

2. Ledger Accounts:

	Cash (101)
Date	Particulars	Ref	Debit	Credit
Mar-01	Common Stock	307	190000
Mar-02	Prepaid rent	131		6500
Mar-06	Services Revenue	403	5500
Mar-12	Accounts payable	201		6400
Mar-19	Prepaid Insurance	128		7100
Mar-22	Accounts Receivable	106	3600
Mar-29	Dividends	319		6400
Mar-31	Utilities Expense	690		1300
			199100	27700
	Debit balance		171400

	Accounts Receivable (106)
Date	Particulars	Ref	Debit	Credit
Mar-09	Services Revenue	403	11400
Mar-22	Cash	101		3600
Mar-25	Services Revenue	403	4150
			15550	3600
	Debit balance		11950

	Office Supplies (124)
Date	Particulars	Ref	Debit	Credit
Mar-03	Accounts payable	201	2400
Mar-30	Accounts payable	201	800
			3200	0
	Debit balance		3200

	Prepaid Insurance (128)
Date	Particulars	Ref	Debit	Credit
Mar-19	Cash	101	7100
	Debit balance		7100

	Prepaid rent (131)
Date	Particulars	Ref	Debit	Credit
Mar-02	Cash	101	6500
	Debit balance		6500

	Office Equipment (163)
Date	Particulars	Ref	Debit	Credit
Mar-01	Common Stock	307	30000
Mar-03	Accounts payable	201	4000
	Debit balance		34000

	Accounts Payable
Date	Particulars	Ref	Debit	Credit
Mar-03	Office Equipment	163		4000
	Office Supplies	124		2400
Mar-12	Cash	101	6400
Mar-30	Office supplies	124		800
			6400	7200
	Credit balance			800
	Common Stock (307)
Date	Particulars	Ref	Debit	Credit
Mar-01	Cash	101		190000
	Office equipment	163		30000
	Credit balance			220000
	Dividends (319)
Date	Particulars	Ref	Debit	Credit
Mar-29	Cash	101	6400
	Debit balance		6400
	Service revenue (403)
Date	Particulars	Ref	Debit	Credit
Mar-06	Cash	101		5500
Mar-09	Accounts Receivable	106		11400
Mar-25	Accounts Receivable	106		4150
	Credit balance			21050
	Utilities Expense (690)
Date	Particulars	Ref	Debit	Credit
Mar-31	Cash	101	1300
	Debit balance		1300

3.

Trial Balance
Particulars	Debit	Credit
Cash (101)	171400
Accounts Receivable (106)	11950
Office Supplies (124)	3200
Prepaid Insurance (128)	7100
Prepaid rent (131)	6500
Office Equipment (163)	34000
Accounts Payable		800
Common Stock (307)		220000
Dividends (319)	6400
Service revenue (403)		21050
Utilities Expense (690)	1300
	241850	241850