Question

Denzel Brooks opens a web consulting business called Venture Consultants and completes the following transactions in March. Using the following transactions, record journal entries, create financial statements, and assess the impact of each transaction on the financial statements. 1 Brooks invested $150,000 cash along with $22,000 in office equipment in the company in exchange for common Mar. stock. 2 The company prepaid $6,000 cash for six months' rent for an office. The company's policy is to record prepaid expenses in balance sheet accounts. 3 The company made credit purchases of office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days. Mar. Mar. 6 The company completed services for a client and immediately received $4,000 cash. 9 The company completed a $7,500 project for a client, who must pay within 30 days. 12 The company paid $4,200 cash to settle the account payable created on March 3. Mar. Mar. Mar. Mar. 19 The company paid $5,000 cash for the premium on a 12-month insurance policy. The company's policy is to record prepaid expenses in balance sheet accounts. Mar. 22 The company received $3,500 cash as partial payment for the work completed on March 9. 25 The company completed work for another client for $3,820 on credit. Mar. Mar. 29 The company paid $5,100 cash in dividends. Mar. 30 The company purchased $600 of additional office supplies on credit. Mar. 31 The company paid $500 cash for this month's utility bill. St Retained Earnings General Journal Balance General Income Impact on Equity Requirement Trial Balance Sheet Ledger Statement General Journal Tab - For each transaction, prepare the required journal entry on the General Journal tab. List debits before credits. Each journal entry is automatically posted to the General Ledger. General Ledger Tab - To see the detail of all transactions that affect a specific account, or the balance in an account at a specific point in time, click on the General Ledger tab. Abnormal balances appear in parentheses. Click on any amount to see the underlying journal entry. Trial Balance Tab - A trial balance lists each account from the General Ledger, along with its balance, either a debit or a credit. Total debits should always equal total credits. If your trial balance doesn't balance, review your journal entries on the general journal tab. Income Statement Tab - Using the dropdown buttons, select the financial statement elements and account titles to be included on the income statement. The account balances will automatically populate. Statement of Retained Earnings Tab - Using the dropdown buttons, select the item that accurately describes the values that either increase or decrease the owner's capital balance. Balance Sheet Tab - Using the dropdown buttons, select the financial statement elements and account titles to be included on the balance sheet. The account balances will automatically populate. Impact on Equity Tab - Using the dropdown buttons, indicate the impact each item has on total equity. Compare the total with the amount of equity reported on the balance sheet. General Journal > Requirement

Answer 1

Solution:

Date	Account Title & Explanation	Debit ($)	Credit ($)
Mar-01	Cash	150000
	Office equipment	22000
	Brooks Capital		172000
Mar-02	Prepaid rent	6000
	Cash		6000
Mar-03	Office equipment	3000
	Office supplies	1200
	Accounts payable		4200
Mar-06	Cash	4000
	Service revenue		4000
Mar-09	Accounts receivable	7500
	Service revenue		7500
Mar-12	Accounts payable	4200
	Cash		4200
Mar-19	Prepaid Insurance	5000
	Cash		5000
Mar-22	Cash	3500
	Accounts receivable		3500
Mar-25	Accounts receivable	3820
	Service revenue		3820
Mar-29	Brook's Withdrawal	5100
	Cash		5100
Mar-30	Office supplies	600
	Accounts payable		600
Mar-31	Utilities Expenses	500
	Cash		500

Venture Consultants
Trial Balance
For the month ended March 31
Account Titles	Debit $	Credit $
Cash	136700
Accounts Receivable	7820
Office supplies	1800
Prepaid insurance	5000
Prepaid Rent	6000
Office equipment	25000
Accounts payable		600
Brook's capital		172000
Brook's withdrawal	5100
Service revenue		15320
Utilities Expenses	500
TOTAL	187920	187920

Venture Consultants
Income Statement
For the month ended March 31
Income
Service Revenue	$15,320
Utilities Expenses	($500)
Net Income	$14,820
Venture Consultants
Statement of retained earnings
For the month ended March 31
Retained earnings, Beginning balance	$0
Net income	$14,820
Less: Dividends	($5,100)
Retained earnings, Ending balance	$9,720