Question

• You have just been hired as the accountant for Lay’s Lush Landscape Sales & Service, Inc. which started operations on January 01, 2016.
• Prepare the journal entries (omit explanations) for all transactions from January 01, 2016 through June 30, 2016, post all journal entries to the general ledger, and prepare an Unadjusted Trial Balance for the six months ending June 30, 2016.

Transactions:

1/1       The owner of the business contributed $10,000 cash and a truck worth $16,000 to the business in exchange for 26,000 shares of $1par common stock. This is the first ever transaction for the business. Use perpetual inventory.

1/31     Borrowed $50,000 on a note payable from the bank.

1/31     Paid January rent, $500

2/01     Purchased equipment for $10,000 cash.

2/15     Purchased 100 bags of lawn fertilizer for $2.00 per bag on account (this lawn fertilizer will be sold to customers to apply themselves)

2/01     Paid February rent, $500

3/01     Prepaid, March – December rent at $500 per month

3/01     Purchased 100 bags of weed preventive fertilizer for $8 per bag on account (this fertilizer will be sold to customers to apply themselves)

3/01     Paid amount owed on lawn fertilizer from 2/15 transaction

3/15     Sold 20 bags of weed preventive fertilizer for $15 per bag (cash)

3/15     Received $500 cash from customers for spring lawn services performed

3/15     Performed spring lawn service to customers on account $750

4/01     Collected $500 from customers on account from 3/15 transaction

4/14     Collected $250 from customers on account from 3/15 transaction

4/15     Sold 25 bags of weed preventive fertilizer for $15 per bag (cash)

4/15     Sold 15 bags of lawn fertilizer for $6 per bag (cash)

4/15     Paid for advertising campaign, $5,000 cash

5/01     Received payment for summer services in advance from 20 customers

            5 months (May – September) at $1000 each for a total of $100,000

5/31     Received payment for May’s lawn services provided from 5 customers, $5,500

5/31     Performed May lawn service for 5 customers on account to be received by 6/15, $5,500

5/31     Paid fuel expense of $1,000 for May

6/05     Paid wages to employees for May, $8000

6/15     Received payment from May’s credit customers, $5,500

6/15     Sold 20 bags of lawn fertilizer for $6 per bag (cash)

6/30     Received payment for June’s lawn service from 4 customers, $4,400

6/30     Performed June lawn service for 5 customers on account to be received by 7/15, $5,500

6/30     Purchased supplies on account, $1,000

6/30     Paid semi-annual payment on note from bank, $4,000 principal plus $2,000 interest expense for a total payment of $6,000

6/30     Paid fuel expense of $1,000 for May

Answer 1

Journal Entries
Date	Particulars	Amount
1-Jan	Bank A/c Dr.	10,000
	Truck A/c Dr.	16,000
	To share Capital A/c	26,000
31-Jan	Bank A/c Dr.	50,000
	To Loan From Bank	50,000
31-Jan	Rent a/c Dr	500
	To Bank A/c	500
1-Feb	Equipment A/c Dr	10,000
	To Bank A/c	10,000
15-Feb	Purchase a/c Dr.	200
	To Sundry Creditors A/c	200
1-Feb	Rent a/c Dr	500
	To Bank A/c	500
1-Mar	Prepaid Rent A/c Dr	5,000
	To Bank A/c	5,000
1-Mar	Purchase a/c Dr.	800
	To Sundry Creditors A/c	800
1-Mar	Sundry Creditors A/c Dr.	200
	To Bank A/c	200
15-Mar	Bank A/c Dr.	300
	To Sales A/c	300
15-Mar	Bank A/c Dr.	500
	To Sales A/c	500
15-Mar	Debtors A/c Dr	750
	To Sales A/c	750
31-Mar	Rent a/c Dr	500
	To Prepaid Rent A/c	500
1-Apr	Bank A/c Dr.	500
	To Debtors A/c	500
14-Apr	Bank A/c Dr.	250
	To Debtors A/c	250
15-Apr	Bank A/c Dr.	375
	To Sales A/c	375
15-Apr	Bank A/c Dr.	90
	To Sales A/c	90
15-Apr	Advertisment Exp	5,000
	To Bank A/c	5,000
30-Apr	Rent a/c Dr	500
	To Prepaid Rent A/c	500
1-May	Bank A/c Dr.	100,000
	To Advance From Customers	100,000
31-May	Bank A/c Dr.	5,500
	To Sales A/c	5,500
31-May	Debtors A/c Dr	5,500
	To Sales A/c	5,500
31-May	Rent a/c Dr	500
	To Prepaid Rent A/c	500
31-May	Fuel Exp	1,000
	To Bank A/c	1,000
31-May	Advance From Customers	20,000
	To Sales A/c	20,000
5-Jun	Wages	8,000
	To Bank A/c	8,000
15-Jun	Bank A/c Dr.	5,500
	To Debtors A/c	5,500
15-Jun	Bank A/c Dr.	120
	To Sales A/c	120
30-Jun	Bank A/c Dr.	4,400
	To Sales A/c	4,400
30-Jun	Debtors A/c Dr	5,500
	To Sales A/c	5,500
30-Jun	Purchase a/c Dr.	1,000
	To Sundry Creditors A/c	1,000
30-Jun	Loan From Bank a/c Dr.	4,000
	Interest A/c Dr	2,000
	To Bank A/c	6,000
30-Jun	Fuel Exp	1,000
	To Bank A/c	1,000
30-Jun	Rent a/c Dr	500
	To Prepaid Rent A/c	500
30-Jun	Advance From Customers	20,000
	To Sales A/c	20,000

Trial Balance as on June 30,
Debit	Amount'	Credit	Amount'
Bank	140,335	Share Capital	26,000
Truck	16,000	Loan From Bank	46,000
Rent	3,000	Sundry Creditors	1,800
Equipment	10,000	Sales	63,035
Purchase	2,000	Advance From Customers	60,000
Prepaid Rent	3,000
Debtors	5,500
Advertisement exp	5,000
Fuel Exp	2,000
Wages	8,000
Interest	2,000
	196,835		196,835