Question

Section C: Long Question (SK2:15 marks - 1 x 15 marks) C1 - Transactions of Star Company for the month of January 2019 are presented below: 1. On January 1, 2019, the owner invested $75,000 cash in the business. 2. Purchased equipment for $35,000 cash. 3. Purchased supplies on account for $8,000. 4. Received a bill for $1,250 for advertising of the current month. 5. Provided $17,500 of programming services for customers. Star company received cash of $7,500 from customers, and billed the customers with the remaining amount. 6. Paid the following January expenses in cash: salaries $4,500, rent $3,000, and utilities $1,000. 7. Paid its $1,250 advertising bill in cash. 8. The owner withdrew $6,500 in cash from the business for his personal use. Required: 1- Prepare journal entries to record the above transactions. (5 marks) 2- Post to the appropriate ledger accounts. (5 marks) 3- Prepare the trial balance of Star Company on January 31, 2019. (5 marks)

Answer 1

date	explanation	debit	credit			T-Account
1-	cash	75000				cash
	capital		75000		capital	75000	equipment	35000
					revenue from programming service	7500	salaries expense	4500
2-	equipment	35000					rent expense	3000
	cash		35000				utilities expense	1000
							advertising expense payable	1250
3-	supplies	8000					drawing	6500
	accounts payable		8000					31250
					total	82500	total	82500
4-	advertising expense	1250
	advertising expense payable		1250
						capital
5-	cash	7500			balance	75000	cash	75000
	accounts receivables	10000
	revenue from programming service		17500
						equipment
6-	salaries expense	4500			cash	35000	balance	35000
	rent expense	3000
	utilities expense	1000
	cash		8500			accounts payable
					balance	8000	supplies	8000
7-	advertising expense payable	1250
	cash		1250
						supplies
8-	drawing	6500			accounts payable	8000	balance	8000
	cash		6500
Trial Balance						advertising expense
explanation	debit	credit			advertising expense payable	1250	balance	1250
cash	31250
capital		75000
equipment	35000					advertising expense payable
accounts payable		8000			cash	1250	advertising expense	1250
supplies	8000
advertising expense	1250					accounts receivables
accounts receivables	10000				revenue from programming service	10000	balance	10000
revenue from programming service		17500
salaries expense	4500
rent expense	3000					revenue from programming service
utilities expense	1000				balance	17500	cash	7500
drawings	6500						accounts receivables	10000
total	100500	100500
						salaries expense
					cash	4500	balance	4500
						rent expense
					cash	3000	balance	3000
						utilities expense
					cash	1000	balance	1000