Question

ACR5.2 On November 1, 2022, Ikonk, Inc. had the following account balances. The company uses the perpetual inventory method. Debit Credit Cash $ 9,000 Accumulated Depreciation Accounts Receivable 2.240 Equipment $ 1.000 Supplies Accounts Payable 3.400 Equipment 25.000 Unearned Service Revenue 4.000 $37.100 Salaries and Wages Payable 1,700 Common Stock 20,000 Retained Earnings 7,000 $37.100 During November, the following summary transactions were completed. Nov. 8 Paid $3,550 for salaries due employees, of which $1,850 is for November and $1,700 is for October 10 Received $1,900 cash from customers in payment of account 11 Purchased merchandise on account from Dimas Discount Supply for $8,000, terms 2/10, n/30, 12 Sold merchandise on account for $5.500, terms 2/10, n/30. The cost of the mer chandise sold was $4.000 15 Received credit from Dimas Discount Supply for merchandise returned $300 19 Received collections in full, less discounts, from customers billed on sales of $5.500 on November 12 20 Paid Dimas Discount Supply in full, less discount. 22 Received $2,300 cash for services performed in November 25 Purchased equipment on account 55,000 27 Purchased supplies on account $1.700. 28 Paid creditors $3,000 of accounts payable due. 29 Paid November rent $375. 29 Paid salaries $1,100. 29 Performed services on account and billed customers $700 for those services. 29 Received $675 from customers for services to be performed in the future. Adjustment data: 1. Supplies on hand are valued at $1,600. 2. Accrued salaries payable are $500. 3. Depreciation for the month is $250. 4. $650 of services related to the unearned service revenue has not been performed by month-end. Instructions a. Enter the November 1 balances in ledger T-accounts. b. Journalize the November transactions c. Post to the ledger accounts. You will need to add some accounts.

Answer 1

Ikonk Inc. Journal Enteries Date Particulars 8.11.2022 Salary Payable a/c Salary Expense a/c To Cash (Salary paid) Dr. Dr. Debit in $ Credit in $ 1700 1850 3550 10.11.2022 1900 Cash a/c Dr. To Accounts receivable (Cash from debtors) 1900 11.11.2022 8000 Inventory a/c Dr. To Accounts Payable (Inventory Purchased) 8000 Dr. 5500 12.11.2022 Accounts Receivable a/c To Sales (Sales on account) 5500 4000 Cost of good sold a/c Dr. To Inventory (To record cost of goods sold) 4000 Dr. 300 15.11.2022 Accounts Payable a/c To Inventory (Goods returned) 300 19.11.2022 5390 110 Cash a/c Dr. Sales Discount a/c Dr To Accounts receivable (Cash from debtors) 5500

Dr. Date Particulars 20.11.2022 Accounts Payable a/c To Cash To Inventory Debit in $ Credit in $ 7700 7546 154 22.11.2022 Dr. 2300 Cash a/c To Services Revenue (Services for cash) 2300 25.11.2022 Dr. 5000 Equipment a/c To Accounts Payable (Equipment on account) 5000 27.11.2022 1700 Supplies a/c Dr. To Accounts Payable (Supplies purchased on account) 1700 Dr. 3000 28.11.2022 Accounts Payable a/c To Cash (Cash to Creditors) 3000 Dr. Dr. 375 29.11.2022 Rent Expense a/c To Cash (Rent paid) 375 29.11.2022 Dr. 1300 Salaries Expense a/c To Cash (Salaries paid) 1300 29.11.2022 700 Accounts Receivable a/c Dr. To Services Revenue (Services provided on account) 700 29.11.2022 Cash a/c Dr. To Unearned Services Revenue (Advance from client) 675

Adjusting Enteries Trans. Particulars Debit in $ Credit in $ 1 Supplies Expense a/c Dr. 960 To Supplies Inventory (Supplies expensed) 860 + 1700 - 1600 960 Dr. 500 Salary Expense a/c To Salary Payable (Salary accrued) 500 ? Dr. 250 Depreciation Expense a/c To Accum. Depre - Equip. (To record depreciation) 250 4025 Unearned Service Revenue a/c Dr. To Service Revenue (Revenue recognized) 4025 Dr. Closing Enteries Trans. Particulars 1 Income Summary a/c To Sales Discount To Cost of good sold To Salary Expense To Supplies Expense To Depreciation Expense To Rent Expense (Expense accounts closed) Debit in $ Credit in $ 9345 110 4000 2350 2260 250 375 Dr. Dr. 7025 5500 Service Revenue a/c Sales a/c To Income Summary (Revenue accounts closed) 12525 Dr. 3180 Income Summary a/c To Retained Earnings (Profits transferred) 3180

Worksheet For the Month ending 30.11.2022 Particulars Cash Accounts Receivable Inventory Supplies Equipment Accum. Depre - Equip. Accounts Payable Unearned Service Revenue Salary Payable Common Stock Retained Earnings Service Revenue Sales Sales Discount Cost of good sold Salary Expense Supplies Expense Depreciation Expense Rent Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 3494 3494 1040 1040 3546 3546 2560 960 1600 30000 30000 1000 250 1250 7100 7100 4675 4025 650 500 500 20000 20000 7000 7000 3000 4025 7025 5500 5500 110 110 4000 4000 1850 500 2350 1300 960 2260 250 250 375 375 48275 48275 5735 5735 49025 49025

Statement of Income For the Month ending 30.11.2022 Service Revenue Sales Sales Discount Net Revenue Cost of good sold Gross Profit Salary Expense Supplies Expense Depreciation Expense Rent Expense Net Income 7025 5500 -110 12415 -4000 8415 2350 2260 250 375 5235 3180 Statement of Retained Earnings For the Month ending 30.11.2022 Beginning Balance Net Loss 7000 3180 10180

Balance Sheet As at 31.12.2016 Assets Current Assets Amounts in $ Amounts in $ Cash Amounts in $ Amounts in $ Liabilities Current Liabilities 3494 Accounts Payable 1040 Unearned Service Revenue 3546 Salary Payable 1600 9680 Accounts Receivable Inventory Supplies 7100 650 500 8250 Non Current Assets Equipment Accum. Depre - Equip. Total Assets 30000 -1250 Shareholders Equity Common Stock 28750 Retained Earnings 38430 Total Liabilities & Equity 20000 10180 30180 38430