Question

Followings are the transactions related to HCD for catering services company on November 1,2018. During the first month of operations the following transactions occurred:

Nov. 1 Invested $150,000 cash in new business
2 Purchased Car for $15,000 cash
3 Purchased office furniture for $5,000 on account from IKEA
4 Paid $1,500 cash utilities
5 Hired a manager at a salary of $4,000 per month, effective December 1
6 Rendered services for $8,000 on account
7 Rendered services for $100,000, received $40,000 cash and the remaining on account
8 Paid $800 for November office rent
9 Purchased land costing $50,000 by paying 20,000 cash and the remaining on account.
10 Purchased supplies for $5,000, paid 50% cash and the remaining on account
11 Paid $1,200 cash for a one-year insurance policy
12 Paid $5,000 on account for IKEA (November 3)
13 Received $4,000 cash in advance for future services
14 Received $8,000 on account for services performed on November 6.
15 Signed Notes Payable for a loan of $12,000 from ADIB Bank
16 Paid advertising expense $1,500
17 Billed customers $1,800 for services provided
18 Purchased Car for $25,000 paid $15,000 cash and signed a note payable for the Remaining balance
19 They bought a software for the company of $8,000 cash
20 Depreciation expense for the month of November 5,000
21 Collected $60,000 cash for services provided on November 7
22 Purchased gas and oil for $700 cash
23 Purchased inventory for $1,500 on account
31 Paid $6,250 salaries of the month

Instructions:
a) Journalize the transactions

b) Prepare a trial balance on November 30,2018

c) Prepare an income statement and owners’ equity statement for the month of November and a balance sheet at November 30
HINT: Trial Balance = $324,800
Total Assets = $304,050

Answer 1

Journal Entries Post Account Title and Explaination Date Debit Credit Ref. Cash Nov.1 150,000.00 Capital (To record cash invested into business) 150,000.00 Car Nov.2 15,000.00 Cash $ 15,000.00 (To record car purchased) Office Furniture Nov.3 5,000.00 Accounts Payable (To record office furniture purchased on account) 5,000.00 Utilities Expense $ 1,500.00 Nov.4 Cash $ 1,500.00 |(To record cash paid for utilities expense) No Journal Entry Required Nov.5

Accounts Receivable $ Nov.6 8,000.00 Service Revenue 8,000.00 (To record service provided on account) 40,000.00 Cash $ Nov.7 Accounts Receivable 60,000.00 Service Revenue 100,000.00 (To record Service provided) Rent Expense $ Nov.8 800.00 Cash 800.00 (To record rent paid) Land Nov.9 50,000.00 Cash 20,000.00 Accounts Payable 30,000.00 (To record Lamd Purchased) Nov.10 Supplies 5,000.00 Cash Accounts Payable (To record Supplies purchased) 2,500.00 $ 2,500.00 EA A

Nov.11 Prepaid Insurance $ 1,200.00 Cash $ 1,200.00 (To record one year insurance purchased) Nov.12 Accounts Payable $ 5,000.00 Cash 5,000.00 (To record Payment of payables) Cash Nov.13 4,000.00 Unearned Service Revenue $ 4,000.00 (To record advance received) Cash $ Nov.14 8,000.00 Accounts Receivable 8,000.00 (To record collection of receivables) Cash $ Nov.15 12,000.00 Notes Payable $ 12,000.00 |(To record loаn received) Nov.16 Advertising Expenses 1,500.00 Cash 1,500.00 (To record Advertising expenses paid) EA A

Nov.17 Accounts Receivable 1,800.00 Service Revenue 1,800.00 |(To record Service provided on account) Car $ 25,000.00 Nov.18 Cash 15,000.00 Notes Payable 10,000.00 (To record Car Purchased) Nov.19 Software 8,000.00 Cash 8,000.00 (To record Software Purchased) Nov.20 Depreciation Expense $ 5,000.00 Accumulated Depreciation 5,000.00 (To record Depreciation Expense) Cash Nov.21 $ 60,000.00 Accounts Receivable 60,000.00 (To record collection of receivables)

Gas and Oil Expense 700.00 Nov.22 Cash 700.00 |(To record Gas and Oil purchased) Nov.23 Merchandise Inventory 1,500.00 Accounts Payable (Тo record imventory purchased on account) $ 1,500.00 Nov.30 Salaries Expense 6,250.00 Cash 6,250.00 |(To record Salaries paid)