Question

John's House Painting Company started a transactions for December 2019. ACCOUNTING CYCLE TAKE HOME PROBLEM Company started a business on December 1, 2019. He had the following 1. December 1 - Issued capital Stock business der 1 - Issued capital stock for $100,000 to start a house painting 2. December 1 - Paid gas expense $200 3. December 1 - Purchased equipment costing 54,800 on credit. 4. December 12 - Purchased supplies costing $800 on credit. 5. December 18 - Painted three houses totaling $12,000 and billed customers. 6. December 28 - Received $2,000 for houses painted in #5 7. December 31 - Received $1.200 for a job to paint a house in January next year. 8. December 31 - Paid a dividend of $1,000 Required: 1. Prepare journal entries for the above transactions. 2. Post the above transactions to T Accounts. 3. Prepare a Trial Balance. 4. Prepare an Income Statement, Statement of Retained Earnings and a Balance Sheet.

Answer 1

John's House Painting Company Journal Enteries Date Particulars 1.12.2019 Cash a/c To Capital Stock (Capital Invested) Dr. Debit in $ Credit in $ 100000 100000 Debit in $ Credit in $ 102000 10000 800 Dr. 200 4800 1.12.2019 Gas Expense a/c To Cash (Gas expenses paid) Trial Balance For the Month ending 31.12.2019 Particulars Cash Accounts Receivable Supplies Equipment Accounts Payable Deferred Revenue Capital Stock Dividends Service Revenue Gas Expense Totals 200 5600 1200 100000 4800 1000 1.12.2019 Equipment a/c Dr. To Accounts Payable (Equipment on account) 4800 12000 200 118800 118800 800 12.12.2019 Supplies a/c Dr. To Accounts Payable (Supplies on account) 800 Statement of Income For the Month ending 31.12.2019 Service Revenue Gas Expense Net Income 12000 18.12.2019 Accounts Receivable a/c Dr. To Service Revenue (Services on ccount) 12000 -200 11800 12000 2000 28.12.2019 Cash a/c Dr. To Accounts Receivable (Cash received from debtors) Statement of Owner's Equity For the Month ending 31.12.2019 Capital Stock Net Income 2000 100000 11800 111800 Less:Dividends -1000 31.12.2019 Cash a/c Dr. 1200 To Deferred Revenue (Cash received in advance from customers) 1200 110800 1000 31.12.2019 Dividends a/c Dr. To Cash (Dividends paid in cash) 1000

Balance sheet As at 31.12.2021 Assets Current Assets Cash Accounts Receivable Supplies Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Current Liabilities 102000 Accounts Payable 5600 10000 Deferred Revenue 1200 6800 800 112800 Non Current Assets Equipment Total Assets Owner's Equity 4800 Capital Stock 117600 Total Liabilities & Equity 110800 117600

Capital Stock Cash 100000 Capital Stock Accounts Receivable Deferred Revenue 200 1000 Cash 100000 Gas Expense 2000 Dividends 1200 Bal. 103200 100000 100000 100000 102000 103200 Cash Dividends 1000 Bal. 1000 Accounts Receivable 12000 Cash 1000 1000 Service Revenue Bal. 2000 10000 12000 12000 12000 Service Revenue Accounts Receivable 12000 12000 Supplies Accounts Payable 12000 800 Bal. 800 800 800 Cash Gas Expense 200 Bal. 200 200 200 Accounts Payable Equipment 4800 Bal 4800 4800 4800 Bal. Accounts Payable Equipment 5600 Supplies 5600 4800 800 5600 1200 Deferred Revenue Cash 1200 1200 Bal. 1200