Question

P1-7B (p. 44) - Preparing Journal Entries, Posting, and Preparing Trial Balance
	1) Analyze transaction information to
	determine the accounts involved and
	determine the normal balance of each
	account, and determine whether account
	should be increased or decreased.
	2) Record transaction in general journal.
	3) Post to General Ledger.
	4) Prepare a Trial Balance.

Nina Niko launched a new business, Niko's Maintenance Co., that began operations on June 1. The following transactions were completed by the company during that first month.

1 Nina Niko invested $130,000 cash in the company in exchange for its common stock 2 The company rented a furnished office and paid $6,000 cash for June's rent 4 The company purchased $2,400 of equipment on credit 6 The company paid $1,150 cash for this month's advertising of the opening of the business 8 The company completed maintenance services for a customer and immediately collected $850 cash 14 The company completed $7,500 of maintenance services for City Center on credit 16 The company paid $800 cash for an assistant's salary for the first half of the month 20 The company received $7,500 cash payment for services completed for City Center on June 14 21 The company completed $7,900 of maintenance services for Paula's Beauty Shop on credit 24 The company completed $675 of maintenance services for Build-It Coop on credit 25 The company received $7,900 cash payment from Paula's Beauty Shop for the work completed on June 21 26 The company made payment of $2,400 cash for equipment purchased on June 4 The company paid $800 cash for an assistant's salary for the second half of this month. 29 The company paid $4,000 cash in dividends to the owner (sole shareholder) 30 The company paid $150 cash for this month's telephone bill 30 The company paid $890 cash for this month's utilities June 28

Answer 1

1) Accounts Invo lved Normal Balance Increase/Decrease Cash Debit June.1 Increase Credit Common stock Increase Rent Expense Cash Debit 2 Increase Debit Decrease 4 Equipment Debit Increase Accounts Payables Credit Increase Advertaisment Expense Debit 6 Increase Cash Credit Decrease Cash Debit Increase Service Revenue Credit Increase Accounts Receivables Debit 14 Increase Service Revenue Credit Increase Debit Salaries 16 Increase Cash Debit Decrease Cash Debit 20 Increase Accounts Receivables Debit Decrease Debit Accounts Receivables 21 Increase Service Revenue Credit Increase

Accounts Receivables Debit 24 Increase Credit Service Revenue Increase Cash Debit 25 Increase Accounts Receivables Debit Decrease Accounts Payables 26 Credit Decrease Cash Debit Decrease Salaries Debit 28 Increase Cash Debit Decrease Debit 29 Dividend Increase Cash Debit Decrease 30 Telephone Expense Debit Increase Cash Debit Decrease 30 UtilitiesExpense Debit Increase Debit Cash Decrease

General Journal Accout Titles and Explanations Ref.Debit Date Credit Cash 130,000 June.1 Common stock 130,000 Rent Expense 6,000 2 Cash 6,000 4 Equipment Accounts Payables 2,400 2,400 Advertaisment Expense 6 1,150 Cash 1,150 Cash 8 850 Service Revenue 850 Accounts Receivables 14 7,500 Service Revenue 7,500 Salaries 16 800 Cash 800 Cash 20 7,500 Accounts Receivables 7,500 Accounts Receivables 7,900 21 Service Revenue 7,900

Accounts Receivables 24 675 Service Revenue 675 Cash 7,900 25 Accounts Receivables 7,900 Accounts Payables 26 2,400 Cash 2,400 Salaries 28 800 Cash 800 29 Dividend 4,000 Cash 4,000 30 Telephone Expense 150 Cash 150 30 UtilitiesExpense 890 Cash 890

ACCOUNT No Cash BALANCE REF DATE ITEM DEBIT CREDIT DEBIT CREDIT June.1 Common stock 130,000 130,000 Rent Expense 6 Advertaisment Expense 6,000 1,150 2 124,000 122,850 8 Service Revenue 850 123,700 122,900 130,400 138,300 135,900 135,100 16 Salaries 20 Accounts Receivables 25 Accounts Receivables 26 Accounts Payables 28 Salaries 29 Dividend 30 Telephone Expense 30 UtilitiesExpense 800 7,500 7,900 2,400 800 131,100 130,950 4,000 150 890 130,060 Common stock ACCOUNT No. BALANCE REF DATE ITEM DEBIT CREDIT DEBIT CREDIT June,1 Cash 130,000 130,000

Rent Expense ACCOUNT No. BALANCE REF CREDIT DATE ITEM DEBIT DEBIT CREDIT 6,000 June 2 Cash 6,000 Equipment ACCOUNT No. BALANCE DEBIT DATE ITEM REF. DEBIT CREDIT CREDIT Accounts Payable June 4 2,400 2,400 Accounts Payable ACCOUNT No. BALANCE REF CREDIT DATE ITEM DEBIT DEBIT CREDIT June 4 26 Equipment 2,400 2,400 Cash 2,400.0 Advertaisment Expense ACCOUNT No. BALANCE DEBIT DATE ITEM REF. DEBIT CREDIT CREDIT June 6 Cash 1,150 1,150

Service Revenue ACCOUNT No. BALANCE REF DATE ITEM DEBIT CREDIT DEBIT CREDIT June.8 Cash 850 850 14Accouts Receivables 21Accouts Receivables 24 Accouts Receivables 8,350 7,500 16,250 16,925 7,900 675 Salaries Expense ACCOUNT No. BALANCE REF DATE CREDIT ITEM DEBIT DEBIT CREDIT June,16 Cash 800 800 28 Cash 800 1,600 Accounts Receivables ACCOUNT No. BALANCE REF DATE ITEM DEBIT CREDIT DEBIT CREDIT June.14 Service Revenue 7,500 7,500 20 Cash 7,500 21 Service Revenue 7,900 7,900 8,575 24 Service Revenue 25 Cash 675 7,900 675

Dividend ACCOUNT No. BALANCE REF DEBIT DATE ITEM DEBIT CREDIT CREDIT June 29 Cash 4,000 4,000 Telephone Expense ACCOUNT No. BALANCE REF CREDIT DEBIT DATE ITEM DEBIT CREDIT June 30 Cash 150 150 Utilities Expense ACCOUNT No. BALANCE REF. DATE ITEM DEBIT CREDIT DEBIT CREDIT June.30 Cash 890 890

Trail Balance Accout Titles Debit Credit Common stock Cash 130,000 130,060 Rent Expense Advertaisment Expense Service Revenue 6,000 1,150 16,925 Salaries 1,600 Accounts Receivables 675 Accounts Payables Dividend 4,000 Telephone Expense UtilitiesExpense Equipment 150 890 2,400 146,925 146,925 Total