Question

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business:

June	1	Kris transferred cash from a personal bank account to an account to be used for the business, $35,000.
	1	Paid rent for period of June 1 to end of month, $4,750.
	6	Purchased office equipment on account, $14,100.
	8	Purchased a van for $28,500 paying $4,500 cash and giving a note payable for the remainder.
	10	Purchased supplies for cash, $2,380.
	12	Received cash for job completed, $12,200.
	15	Paid annual premiums on property and casualty insurance, $3,600.
	23	Recorded jobs completed on account and sent invoices to customers, $11,900.
	24	Received an invoice for van expenses, to be paid in June, $1,500.

Enter the following transactions on Page 2 of the two-column journal:

June	29	Paid utilities expense, $3,100.
	29	Paid miscellaneous expenses, $950.
	30	Received cash from customers on account, $7,330.
	30	Paid wages of employees, $5,070.
	30	Paid creditor a portion of the amount owed for equipment purchased on June 6, $6,825.
	30	Withdrew cash for personal use, $1,600.

	Required:
1.	Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the post reference numbers until you have posted the entry to the general ledger in part 2.)
2.	Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in both the journal and the ledger as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.
3.	Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 2019.
4.	Determine the excess of revenues over expenses for June.
5.	Can you think of any reason why the amount determined in (4) might not be the net income for June?

Chart of Accounts CHART OF ACCOUNTS Eco-Centric Designs General Ledger ASSETS REVENUE 41 Fees Earned 11 Cash 12 Accounts Receivable EXPENSES 13 Supplies 14 Prepaid Insurance 16 Office Equipment 18 Van 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Van expense 59 Miscellaneous Expense LIABILITIES 21 Notes Payable 22 Accounts Payable EQUITY 31 Kris Storey. Capital 32 Kris Storey. Drawing

1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the post reference numbers until you have posted the entry to the general ledger in part 2.)

UNADJUSTED TRIAL BALANCE

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Insurance
5	Office Equipment
6	Van
7	Notes Payable
8	Accounts Payable
9	Kris Storey, Capital
10	Kris Storey, Drawing
11	Fees Earned
12	Wages Expense
13	Rent Expense
14	Utilities Expense
15	Van expense
16	Miscellaneous Expense
17	Totals

Final Questions

Answer 1

Post ref Debit Credit Eco-Centric Designs Journal entries Date Account Page 1 1-Jun Cash Capital GL1 $ 35,000 GLI $ 35,000 1-Jun $ 4,750 Rent Expense Cash GL1 GLI $ 4,750 6-Jun $ 14,100 Office Equipment Accounts Payable GL1 GL1 $ 14,100 8-Jun $ 28,500 Vehicle Cash Notes Payable GL1 GL1 GL1 $ 4,500 $ 24,000 $ 2,380 10-Jun Supplies Cash GL1 GL1 $ 2,380 12-Jun $ 12,200 Cash Service Revenue GL1 GLI $ 12,200 $ 3,600 15-Jun Prepaid Insurance Cash GL1 GL1 $ 3,600 $ 11,900 23-Jun Accounts Receivable Service Revenue GL1 GL1 $ 11,900 $ 1,500 GL1 GL1 $ 1,500 24-Jun Van Expense Accounts Payable Page 2 29-Jun Utilities expense Cash $ 3,100 GL2 GL2 $ 3,100 $ 950 29-Jun Miscellaneous expenses Cash GL2 GL2 $ 950 30-Jun $ 7,330 Cash Accounts Receivable GL2 GL2 $ 7,330 $ 5,070 30-Jun Wages expenses Cash GL2 GL2 $ 5,070 $ 6,825 30-Jun Accounts Payable Cash GL2 GL2 $ 6,825 $ 1,600 30-Jun Drawing Cash GL2 GL2 $ 1,600

Eco-Centric Designs T Accounts Date Item Credit Balance Debit Credit Balance Debit Credit Date Item Credit Post Ref Debit Cash Post Ref Debit Accounts Receivable $ 35,000 1-Jun Balance 23-Jun Service Revenue 30-Jun Cash GL1 GL1 GL1 $ 11,900 GL1 GL2 $ $ 11,900 7,330 $ 4,570 $ 4,570 $ 12,200 1-Jun Balance 1-Jun Capital 1-Jun Rent Expense 8-Jun Vehicle 10-Jun Supplies 12-Jun Service Revenue 15-Jun Prepaid Insurance 29-Jun Utilities expense 29-Jun Miscellaneous expenses 30-Jun Accounts Receivable 30-Jun Wages expenses 30-Jun Accounts Payable 30-Jun Drawing $ 35,000 $ 4,750 $ 30,250 $ 4,500 $ 25,750 $ 2,380 $ 23,370 $ 35,570 $ 3,600 $ 31,970 $ 3,100 $ 28,870 $ 950 $ 27,920 $ 35,250 $ 5,070 $ 30,180 $ 6,825 $ 23,355 $ 1,600 $ 21,755 $ 7,330 GL2 GL2 Prepaid Insurance Supplies 1-Jun Balance 15-Jun Cash GL1 1-Jun Balance 10-Jun Cash $ $ $ $ 3,600 . 3,600 3,600 GL1 $ 2,380 $ $ $ - 2,380 2,380 Office Equipment Vehicle 1-Jun Balance 6-Jun Accounts Payable 1-Jun Balance 8-Jun Cash & Notes Payable $ 14,100 $28,500 $ 28,500 GL1 $ 14,100 Accounts Payable GL1 Notes Payable $ 1-Jun Balance 8-Jun Vehicle GL1 $ 24,000 $ 24,000 1-Jun Balance 6-Jun Office Equipment 24-Jun Van Expense 30-Jun Cash $ 14,100 $ 1,500 GL1 GLI GL2 Capital $ - $ 14,100 $ 15,600 $ 8,775 $ 6,825 1-Jun Balance 1-Jun Cash $ - $ 35,000 $ 35,000 GL1 Drawing 1-Jun Balance 30-Jun Cash $ $ - 1,600 1,600 GL2 $ Service Revenue Wages expenses 1-Jun Balance 12-Jun Cash 23-Jun 1-Jun Balance 30-Jun Cash $ - $ 12,200 $ 24,100 GL2 GL1 GL1 Rent Expense $ 5,070 $ 12,200 $ 11,900 $ $ 5,070 5,070 Utilities expense 1-Jun Balance 1-Jun Cash 1$ 4,750 | $ $ . 4,750 1-Jun Balance 29-Jun Cash $ 4,750 GL2' $ $ GL1 Van Expense $ 3,100 - 3,100 $ 3,100 Miscellaneous expenses 1-Jun Balance 24-Jun Accounts Payable 1-Jun Balance 29-Jun Cash GL1 $ 1,500 $ 1,500 GL2 $ 950 950 $ 950

Eco-Centric Designs Account Names Cash Accounts Receivable Prepaid Insurance Supplies Office Equipment Vehicle Accounts Payable Notes Payable Capital Drawing Service Revenue Wages expenses Rent Expense Utilities expense Van Expense Miscellaneous expenses Totals Unadjusted TB Debit Credit 21,755 4,570 3,600 2,380 14,100 28,500 8,775 24,000 35,000 1,600 24,100 5,070 4,750 3,100 1,500 950 91,875 91,875