Question

Chapter 2 Hand-out Assignment Pat's Party Planning provides food service and bartending for private and corporate parties. Pat's does not prepare the food, but does provide supplies such as dishes, linens, and ice for the event. The following transactions occurred in December 2021, the first month of the business operations: Dec 1 Patty Peppermint invested $18,000 in the business. Dec 3 Business purchased a used delivery van for $6,500 on account. Dec 5 Purchased supplies for cash $1,300. Dec 7 Signed contract to provide services at a party to be held in January. Received a deposit of $750 from the customer. Dec 8 Provide services for a corporate party. Received full payment in the amount of $2,100. Dec 10 Paid the staff who worked at the December 8 party $900 in wages. Dec 14 Provides services for a private party. Issued an invoice for $1,500 to the customer who will pay in January Dec 18 Paid $325 for an advertisement in the local newspaper. The ad began running every day for a week starting December 10. Dec 23 Patty Peppermint withdrew $600 for personal use. Dec 31 Paid for a one-year insurance policy on the delivery van for $1,800, effective Jan 1 to Dec 31, 2022. Instructions a) Prepare the journal entries for the above transactions. Explanations are not necessary. c) Post the entries to T-Accounts b) Prepare a trial balance at December 31, 2021 based on the above accounts.

Answer 1

ANSWER

a)

Date	General Journal	Debit	Credit
Dec. 1	Cash	18000
	Patty Peppermint, capital		18000
Dec. 3	Delivery van	6500
	Accounts payable		6500
Dec. 5	Supplies	1300
	Cash		1300
Dec. 7	Cash	750
	Customer deposits		750
Dec. 8	Cash	2100
	Service revenue		2100
Dec. 10	Wages expense	900
	Cash		900
Dec. 14	Accounts receivable	1500
	Service revenue		1500
Dec. 18	Advertising expense	325
	Cash		325
Dec. 23	Patty Peppermint, drawings	600
	Cash		600
Dec. 31	Prepaid insurance	1800
	Cash		1800

b)

Cash		Accounts Receivable
Beg. Bal.	0				Beg. Bal.	0
Dec. 1	18000	1300	Dec. 5		Dec. 14	1500
Dec. 7	750	900	Dec. 10
Dec. 8	2100	325	Dec. 18		End. Bal.	1500
		600	Dec. 23
		1800	Dec. 31
End. Bal.	15925
Supplies		Prepaid Insurance
Beg. Bal.	0				Beg. Bal.	0
Dec. 5	1300				Dec. 31	1800
End. Bal.	1300				End. Bal.	1800
Delivery Van		Accounts Payable
Beg. Bal.	0				Beg. Bal.		0
Dec. 3	6500						6500	Dec. 3
End. Bal.	6500				End. Bal.		6500
Customer Deposits		Patty Peppermint, Capital
Beg. Bal.		0			Beg. Bal.		0
		750	Dec. 7				18000	Dec. 1
End. Bal.		750			End. Bal.		18000
Patty Peppermint, Drawings		Service Revenue
Beg. Bal.	0				Beg. Bal.		0
Dec. 23	600						2100	Dec. 8
							1500	Dec. 14
End. Bal.	600				End. Bal.		3600
Wages Expense		Advertising Expense
Beg. Bal.	0				Beg. Bal.	0
Dec. 10	900				Dec. 18	325
End. Bal.	900				End. Bal.	325

c)

Pat's Party Planning
Trial Balance
At December 31, 2021
Account	Debit	Credit
Cash	15925
Accounts receivable	1500
Supplies	1300
Prepaid insurance	1800
Delivery van	6500
Accounts payable		6500
Customer deposits		750
Patty Peppermint, capital		18000
Patty Peppermint, drawings	600
Service revenue		3600
Wages expense	900
Advertising expense	325
Total $	28850	28850

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