Question

Chapter 2: Practice Exercise #3: At the beginning of April, Vanessa Williams launched a custom computer solutions company called Softworks. The company had the following transactions during April. a) Vanessa Williams invested $155,000 cash, office equipment with a value of $5,100, and $78,000 of computer equipment in the company in exchange for its common stock. b) The company purchased land worth $55,000 for an office by paying $8,700 cash and signing a long-term note payable for $46,300. c) The company purchased a portable building with $59,000 cash and moved it onto the land acquired in b. d) The company paid $3,500 cash for the premium on a two-year insurance policy. e) The company provided services to a client and immediately collected $7,000 cash. f) The company purchased $26,000 of additional computer equipment by paying $11,800 cash and signing a long-term note payable for $14,200. g) The company completed $16,500 of services for a client. This amount is to be received within 30 days. h) The company purchased $1,800 of additional office equipment on credit. i) The company completed client services for $28,000 on credit. j) The company received a bill for rent of a computer testing device that was used on a recently completed job. The $1,685 rent cost must be paid within 30 days. k) The company collected $10,000 cash in partial payment from the client described in transaction i. 1) The company paid $1,300 cash for wages to an assistant. m) The company paid $1,800 cash to settle the payable created in transaction h. n) The company paid $985 cash for minor maintenance of the company's computer equipment 0) The company paid $10,230 cash for dividends. p) The company paid $1,300 cash for wages to an assistant 4) The company paid $4,300 cash for advertisements in the local newspaper during April. Required 1. Journalize the above transactions 2. Post to the Ledger (open more T-accounts if needed) 3. Prepare a trial balance (IN ORDER) 4. Prepare the 3 Financial Statements 5. Prepare the closing entries

1. Prepare general journal entries to record these transactions. (2pts each)

2. Post the journal entries from to the ledger accounts (2pts ea)

3. Prepare a trial balance (5pts)

4. Prepare the 3 financial statements (15pts).

Answer 1

1.  

Transaction	General Journal	Debit	Credit
		$	$
a.	Cash	155,000
	Office Equipment	5,100
	Computer Equipment	78,000
	Common Stock		238,100
b.	Land	55,000
	Cash		8,700
	Notes Payable		46,300
c.	Building	59,000
	Cash		59,000
d.	Prepaid Insurance	3,500
	Cash		3,500
e.	Cash	7,000
	Service Revenue		7,000
f.	Computer Equipment	26,000
	Cash		11,800
	Notes Payable		14,200
g.	Accounts Receivable	16,500
	Service Revenue		16,500
h.	Office Equipment	1,800
	Accounts Payable		1,800
i.	Accounts Receivable	28,000
	Service Revenue		28,000
j.	Rent Expense	1,685
	Accounts Payable		1,685
k.	Cash	10,000
	Accounts Receivable		10,000
l.	Wages Expense	1,300
	Cash		1,300
m.	Accounts Payable	1,800
	Cash		1,800
n.	Maintenance Expense: Computer	985
	Cash		985
o.	Dividends	10,230
	Cash		10,230
p.	Wages Expense	1,300
	Cash		1,300
q.	Advertising Expense	4,300
	Cash		4,300

3.

Softworks Trial Balance April 30
Account Titles	Debit	Credit
	$	$
Cash	69,085
Accounts Receivable	34,500
Prepaid Insurance	3,500
Office Equipment	6,900
Computer Equipment	104,000
Building	59,000
Land	55,000
Accounts Payable		1,685
Notes Payable		60,500
Common Stock		238,100
Dividends	10,230
Service Revenue		51,500
Advertising Expense	4,300
Wages Expense	2,600
Rent Expense	1,685
Maintenance Expense: Computer	985
Totals	351,785	$ 351,785