Question

The transactions of El Shamaa Company appear below. a. Kareem El Shamaa, owner, invested $14,750 cash in the company. b. The company purchased office supplies for $428 cash. c. The company purchased $8,157 of office equipment on credit. d. The company received $1,740 cash as fees for services provided to a customer. e. The company paid $8,157 cash to settle the payable for the office equipment purchased in transaction c. f. The company billed a customer $3,127 as fees for services provided. g. The company paid $530 cash for the monthly rent. h. The company collected $1,313 cash as partial payment for the account receivable created in transaction f. i. Kareem El Shamaa withdrew $900 cash from the company for personal use. Required: Prepare general journal entries for the above transactions.

Answer 1

Date Credit Debit 14,750 $ Account name Cash Kareem El Shamaa, Capital (to record capital introduced by the owner) $ 14,750 $ 428 $ 428 Office supplies Cash (to record cash paid for office supplies) $ 8,157 $ 8,157 Office equipment Accounts payable (to record credit purchase of equipment)

$ 1,740 $ 1,740 Cash Fees earned (to record fees received from customer for services provided) $ 8,157 $ 8,157 Accounts payable Cash (to record cash paid to settle the payable for office equpment)

$ 3,127 $ 3,127 Accounts receivable Fees earned (to record fees earned and amount receivable from the customer) $ 530 Rent expense Cash (to record rent paid for the month) $ 530 $ 1,313 $ 1,313 Cash Accounts receivable (to record partial payment received from the customer)

$ 900 $ 900 Kareem El Shamaa, Drawings Cash (to record cash withdrawn by the owner for personal use)

Basic account type Increase Decrease Specific accounts in the question Assets Debit | Credit Cash, Office supplies, Office equipment, Accounts receivable Liabilities Credit Debit Accounts payable Capital Credit Debit |Kareem El Shamaa, Capital Income Credit Debit Fees earned Expense Debit Credit Rent expense

1. Office supplies are stock of consumables such as printer cartridges, papers, etc. They are written off as office supplies expense once they are consumed.
2. 'Kareem El Shamaa, Drawings' is a contra-capital account. It decreases capital account. Hence, drawings are debited.