Question

HOMEWORK NO. 3 (LEDGERS AND TRIAL BALANCE) Preparing and posting journal entries; preparing a trial balance At the beginning of April, Ahmed Khan launched a custom computer solutions company called Softworks. The company had the following transactions during April. 1. Ahmed Khan invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company. 2. The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000. 3. The company purchased a portable building with $34,500 cash and moved it onto the land acquired in b. 4. The company paid $5,000 cash for the premium on a two-year insurance policy. 5. The company provided services to a client and immediately collected $4,600 cash. 6. The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long- term note payable for $3,700. 7. The company completed $4,250 of services for a client. This amount is to be received within 30 days. 8. The company purchased $950 of additional office equipment on credit. 9. The company completed client services for $10,200 on credit. 10. The company received a bill for rent of a computer testing device that was used on a recently completed job. The $320 rent cost must be paid within 30 days. 11. The company collected $5,100 cash in partial payment from the client described in transaction i. 12. The company paid $1,800 cash for wages to an assistant. 13. The company paid $950 cash to settle the payable created in transaction h. 14. The company paid $608 cash for minor maintenance of the company's computer equipment. 15. H. Kadir withdrew $6,230 cash from the company for personal use. 16. The company paid $1,800 cash for wages to an assistant. 17. The company paid $750 cash for advertisements on the web during April. Required 1. Prepare general journal entries to record these transactions (use account titles listed in part 2). 2. Make the following ledger accounts their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Computer Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); H. Kadir Capital (301); H. Kadir Withdrawals (302); Fees Earned (402); Wages Expense (601); Computer Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). Post the journal entries from part 1 to the accounts and enter the balance after each posting. 3. Prepare a trial balance as of the end of April. (Hint: Trial balance totals, $141,080)

Answer 1

1. Journal Entries -

Date 1 Softworks Journal Entries Accounts Title Debit Credit Cash $ 65,000 Office Equipment $ 5,750 Computer Equipment $ 30,000 H. Kadir Capital $ 100,750 (To record capital contribution introduced) 2 Land $ 22,000 Cash Notes Payable (To record land purchased) $ 5,000 $ 17,000 3 Building $ 34,500 Cash (To record building purchased) $ 34,500 4 Prepaid Insurance $ 5,000 Cash $ 5,000 (To record 2 years advance payment of insurance) 5 Cash $ 4,600 Fees Earned (To record service earned) $ 4,600 6 Computer Equipment $ 4,500 Cash $ 800 Notes Payable $ 3,700 (To record purchase of computer Equipment) 7 Accounts Receivable $ 4,250 Fees Earned (To record fees earned on account) $ 4,250 8 Office Equipment $ 950 Accounts Payable $ (To record office equipment purchased on account) 950 9 Accounts Receivable $ 10,200 Fees Earned (To record fees earned on account) $ 10,200 10 Computer Rental Expense $ 320 Accounts Payable (To record computer rental expense) $ 320 11 Cash $ 5,100 Accounts Receivable $ 5,100 (To Record Amount collected on account) 12 Wages Expense $ 1,800 Cash (To Record wages expense paid) $ 1,800 13 Accounts Payable $ 950 Cash (To record payment made on account) $ 950 14 Repair Expenses $ 608 Cash (To record minor repair expense) $ 608 15 $ 6,230 H. Kadir Withdrawal Cash $ 6,230 (To record cash withdrawl made) 16 Wages Expense $ 1,800 Cash (To Record wages expense paid) $ 1,800 17 Advertising Expense $ 750 Cash $ (To record advertising expense incurred and paid) 750

2. Ledger -

Notes Payable 2 2 1 5 5 11 Cash $ 65,000 $ 4,600 $ 5,100 $ 17,000 $ 3,700 3 6 4 6 6 12 End Bal$ 20,700 $ 5,000 $ 34,500 $ 5,000 $ 800 $ 1,800 $ 950 $ 608 $ 6,230 $ 1,800 $ 750 13 14 H. Kadir Capital 15 16 17 1 $100,750 End Bal $100,750 End Bal $ 17,262 $ 74,700 $ 74,700 Prepaid Insurance $ 5,000 H. Kadir Withdrawal $ 6,230 4 15 End Bal$ 5,000 End Bal$ 6,230 Fees Earned 7 Accounts Receivable $ $ 4,250 11 $ 10,200 $ 5,100 5 9 7 9 $ 4,600 $ 4,250 $ 10,200 End Bal$ 9,350 End Bal $ 19,050 $ 14,450 $ 14,450 Land $ 22,000 Computer Rental Expense $ 320 2 10 End Bal$ 22,000 End Bal $ 320 1 Office Equipment $ 5,750 $ 950 12 Wages Expense $ 1,800 $ 1,800 8 16 End Bal$ 6,700 End Bal$ 3,600 Computer Equipment $ 30,000 $ 4,500 Repair Expenses 608 1 14 $ 6 End Bal $ 34,500 End Bal $ 608 Building $ 34,500 Advertising Expense $ 750 3 17 End Bal$ 34,500 End Bal$ 750 13 Accounts Payable $ 950 8 10 $ 950 $ 320 End Bal$ 320

3. Trial Balance -

Credit Softworks Trial Balance April 30 Accounts Title Debit Cash $ 17,262 Prepaid Insurance $ 5,000 Accounts Receivable $ 9,350 Land $ 22,000 Office Equipment $ 6,700 Computer Equipment $ 34,500 Building $ 34,500 Accounts Payable Notes Payable H. Kadir Capital H. Kadir Withdrawal $ 6,230 Fees Earned Computer Rental Expense $ 320 Wages Expense $ 3,600 Repair Expenses $ 608 Advertising Expense $ 750 $ 320 $ 20,700 $ 100,750 $ 19,050 Total $ 140,820 $ 140,820

Note - I have twise check the question and consider all the amount still the answer is not matching with the one provided. Balance amount is $260.

There should be amount mistake in the question.