Question

ine llowing pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $45,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $24,000 cash. Apr. 10 Purchased $3,200 of supplies on account. July 1 Received $24,000 cash in advance for services to be provided over the next year. 20 Paid $1,500 of the accounts payable from April 1e. Aug. 15 Billed a customer $18,000 for services provided during August. Sept. 15 Completed a job and received $8,400 cash for services rendered. Oct. 1 Paid employee salaries of $12,000 cash. 15 Received $15,000 cash from accounts receivable. Nov. 16 Billed customers $42,000 for services rendered on account. 1 Paid a dividend of $15,000 cash to the stockholders. 31 Adjusted records to recognize the services provided on the contract of July 1. 31 Recorded $3,600 of accrued salaries as of December 31. 31 Recorded the rent expense for the year. (See February 1.) 31 Physically counted supplies; $280 was on hand at the end of the period. Dec. Problem 3-32A Part a Required a. Record the preceding transactions in the general journal, in the given order. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 6 7 8 ... 15 Billed a customer $18,000 for services provided during August.

Answer 1

Recording the preceding transactions in general Journal:-

Smith Training Company

General Journal

For the Year 1

Date	Accounts Title and Explanation	Debit	Credit
January 30	Cash	$45,000
	Common Stock		$45,000
	(To record the issue of Common Stock)
February 1	Prepaid Rent	$24,000
	Cash		$24,000
	(To record the payment of office rent)
April 10	Supplies	$3,200
	Accounts Payable		$3,200
	(To record the Purchase of Supplies)
July 1	Cash	$24,000
	Unearned Service Revenue		$24,000
	(To record the receipt of Revenue in advance)
July 20	Accounts Payable	$1,500
	Cash		$1,500
	(To record the payment of Accounts Payable)
August 15	Accounts Receivable	$18,000
	Service Revenue		$18,000
	(To record the service Revenue billed)
September 15	Cash	$8,400
	Service Revenue		$8,400
	(To record the receipt of cash Revenue)
October 1	Salaries Expense	$12,000
	Cash		$12,000
	(To record the payment of Salaries)
October 15	Cash	$15,000
	Accounts Receivable		$15,000
	(To record the receipt of cash)
November 16	Accounts Receivable	$42,000
	Service Revenue		$42,000
	(To record the Revenue on Accounts)
December 1	Dividends	$15,000
	Cash		$15,000
	(To record the payment of Dividends)

December 31	Unearned Service Revenue	$12,000
	Service Revenue		$12,000
	(To Adjust the unearned Revenue)
December 31	Salaries Expense	$3,600
	Salaries Payable		$3,600
	(To adjust the accrued Salaries)
December 31	Rent Expense	$11,000
	Prepaid Rent		$11,000
	(To adjust rent Expense)
December 31	Supplies Expense	$2,920
	Supplies		$2,920
	(To record the Supplies Expense)

Working Notes:-

1. Unearned Service Revenue:-

Unearned Service Revenue adjusted from July 1 to December 31 for six months.

So the Service Revenue=($24,000*6/12)

=$12,000

2. Calculations for Rent Expense from February 1 to December 31 for 11 months.

Prepaid Rent for Two years (24 months) is $24,000.

So for 11 months,

Rent Expense=($24,000*11/24 months)

=$11,000

3. Calculations for Supplies Expense:-

Supplies Expense=(Supplies- Supplies at the end)

=($3,200-$280)

=$2,920