Question

Journal Entries and Trial Balance On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month: Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $20,000. Paid rent on office and equipment for the month, $3,740. Purchased supplies on account, $1,110. Paid creditor on account, $410. Earned fees, receiving cash, $17,000. Paid automobile expenses (including rental charge) for month, $1,040, and miscellaneous expenses, $700. Paid office salaries, $2,180. Determined that the cost of supplies used was $610. Withdrew cash for personal use, $1,000. Required: 1. Journalize entries for transactions (a) through (i) (in chronological order), using the following account titles: Cash; Supplies; Accounts Payable; Sharon Matthews, Capital; Sharon Matthews, Drawing; Fees Earned; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. For a compound transaction, if an amount box does not require an entry, leave it blank. a. b. c. d. e. f. g. h. i. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these T accounts, selecting the appropriate letter to the left of each amount to identify the transactions. Determine the account balances (when required), after all posting is complete, for all accounts having two or more debits or credits. Cash Bal. Supplies Bal. Accounts Payable Bal. Sharon Matthews, Capital Sharon Matthews, Drawing Fees Earned Rent Expense Office Salaries Expense Automobile Expense Supplies Expense Miscellaneous Expense 3. Prepare an unadjusted trial balance as of January 31, 2019. For those boxes in which no entry is required, leave the box blank. Tri-City Realty Unadjusted Trial Balance January 31, 2019 Debit Balances Credit Balances 4. As a result of the January transactions (a-i), determine the following: a. Amount of total revenue recorded in the ledger. $ b. Amount of total expenses recorded in the ledger. $ c. Amount of net income for January. $ 5. Determine the total increase or decrease in owner's equity for January. $

Answer 1

Tri-City Realty Journal Enteries Trans. Particulars a. Cash a/c Dr. To Sharon Matthews, Capital (Capital introduced) Debit in $ Credit in $ 20000 20000 b. 3740 Rent Expense a/c Dr. To Cash (Rent for office and equip.) 3740 Unadjusted Trial Balance For the month ending 31.1.2019 Particulars Cash Supplies Accounts Payable Sharon Matthews, Capital Sharon Matthews, Drawing Fees Earned Rent Expense Automobile Expense Miscellaneous Expense Office Salaries Expense Supplies Expense Totals Debit in $ Credit in $ 27930 500 700 20000 1000 17000 3740 1040 700 2180 610 37700 37700 C. 1110 Supplies a/c Dr. To Accounts Payable (Supplies purchased on account) 1110 d. Dr. 410 Accounts Payable a/c To Cash (Creditors paid) 410 Dr. 17000 17000 Cash a/c To Fees Earned (Fees earned) 17000 Statement of Income For the month ending 31.1.2019 Fees Earned Less: Rent Expense Automobile Expense Miscellaneous Expense Office Salaries Expense Supplies Expense Net Income f. Dr. Dr. 1040 700 Automobile Expense a/c Miscellaneous Expense a/c To Cash (Automobile expense paid) 3740 1040 700 2180 610 1740 8270 8730 g. 2180 Office Salaries Expense a/c Dr. To Cash (Salary expense paid) 2180 Statement of Owner's Equity For the month ending 31.1.2019 Sharon Matthews, Capital Net Income h. Dr. 610 Supplies Expense a/c To Supplies (Supplies expensed) 20000 8730 28730 -1000 27730 610 Sharon Matthews, Drawing 1000 Sharon Matthews, Drawing a/c Dr. To Cash (Personal Drawings) 1000

Cash Sharon Matthews, Capital Fees Earned Rent Expense 3740 Bal. 3740 3740 3740 Cash 20000 Rent Expense 17000 Accounts Payable Automobile Expense Miscellaneous Expense Office Salaries Expense Sharon Matthews, Drawing Bal. 37000 3740 410 1040 700 2180 1000 27930 37000 Cash Automobile Expense 1040 Bal. 1040 1040 1040 Accounts Payable Cash Supplies 1110 Supplies Expense Bal. 1110 610 500 Miscellaneous Expense 700 Bal. 700 700 700 1110 1110 Cash Cash Bal. Accounts Payable 410 Supplies 700 1110 Office Salaries Expense 2180 Bal. 2180 2180 1110 2180 20000 Supplies Sharon Matthews, Capital Cash 20000 20000 Supplies Expense 610 Bal. Bal. 610 610 20000 610 Cash Sharon Matthews, Drawing 1000 Bal. 1000 1000 1000 17000 Fees Earned Cash 17000 17000 Bal. 17000