Question

CUMULATIVE PROBLEM - Aster Systems This comprehensive problem starts in this chapter and continues in Chapters 3, 4, and 5. On October 1, 2017. Aster Turane organized a computer service company called Aster Systems. Aster is organized as a sole proprietorship and will provide consulting services, computer system installations, and custom program development. Aster Systems has adopted the calendar year for reporting, and expects to prepare the company's first set of financial statements as of December 31, 2017. The initial chart of accounts for the accounting system includes these items. Account Account Name Number 101 106 A Receivable 126 Car Supplies 128 Pr Insurance 131 Prepaid Rent 163 Office Equipment 167 Computer Equipment 201 Accounts Payable Account Account Name Number 301 Aster Turane, Capital 302 Aster Turane, Withdrawals Computer Services Revenue Wages Expense 655 Advertising Expense 676 Mileage Expense 684 Repairs Expense, Computer 699 Charitable Donations Expense 403 623 Part A Required 1. Set up balance column accounts based on the chart of accounts provided 2. Prepare journal entries to record each of the following October transactions 3. Post the October entries 4. Prepare a trial balance at October 31, 2017 5. Prepare an income statement and a statement of changes in equity for the month ended October 31, 2017, as well as a balance sheet at October 31, 2017 Oct. 1 Astor Turane invested $32,000 cash, a $5,040 computer system, and $12,000 of office equipment in the business 2 Paid six months of rent in advance: $9,300 3 Purchased computer supplies on credit for $1,975 from Triple-One Supplies 5 Paid $8,640 cash for one year's premium on a property and liability insurance policy 6 Billed Norton Electric $3,300 for installing a new computer system. 8 Paid for the computer supplies purchased from Triple-One Supplies 10 Hired Donald Gee as a part-time assistant for $345 per day, as needed 12 Billed Norton Electric another $1,850 for computer services rendered. 15 Received $1,650 from Norton Electric on its account 17 Paid $375 to repair equipment damaged when moving into the new office 20 Paid $1,950 for an advertisement in the local newspaper 22 Received the balance owing from Norton Electric on its account 28 Biled Whistler Resort $6,400 for services. 31 Paid Donald Gee for nine days' work 31 Aster Turane withdrew $1,200 cash from the business for personal use.

Answer 1

Aster Systems Debit in $ Credit in $ 32000 Journal Enteries Date Particulars Oct-01 Cash a/c Dr. Computer System a/c Dr. Office Equipment a/c Dr, To Aster Turane Capital (Capital Invested) Debit in $ Credit in 8755 5040 12000 8250 1975 49040 9300 8640 9300 Oct-02 Prepaid Rent a/c Dr. To Cash ( 6 months rent in advance) Trial Balance For the period ending Oct 31 Particulars Cash Accounts Receivable Computer Supplies Prepaid Rent Prepaid Insurance Office Equipment Computer System Accounts Payable Aster Turane Capital Aster Turane, Withdrawals Computer Service Revenue Repair Expense, Computer Advertisement Expense Wages Expense Totals 12000 5040 9300 0 49040 Dr. 1975 1200 Oct-03 Computer Supplies a/c To Accounts Payable (Supplies on account) 1975 11550 375 1950 8640 Oct-05 Prepaid Insurance a/c Dr. To Cash (12 months Insurance in advance) 3105 60590 8640 60590 3300 Oct-06 Accounts Receivable a/c Dr. To Computer Service Revenue (Revenue earned) 3300 11550 Statement of Income For the period ending Oct 31 Computer Service Revenue Less: Repair Expense, Computer Advertisement Expense Wages Expense Net Income Dr. 1975 Oct-08 Accounts Payable a/c To Cash (Creditors paid) 375 1950 3105 1975 5430 6120 Oct-10 No Entry Statement of Changes in Equity For the period ending Oct 31 Aster Turane Capital Net Income 1850 Oct-12 Accounts Receivable a/c Dr. To Computer Service Revenue (Revenue earned) 1850 49040 6120 55160 -1200 53960 Aster Turane , Withdrawals 1650 Oct-15 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 1650 375 Oct-17 Repair Expense, Computer a/c Dr. To Cash (Expense paid) 375 1950 Oct-20 Advertisement Expense a/c Dr. To Cash (Expense paid) 1950 1650 Oct-22 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 1650 6400 Oct-28 Accounts Receivable a/c Dr. To Computer Service Revenue (Revenue earned) 6400 Dr. 3105 Oct-31 Wages Expense a/c To Cash (Wages paid) 345 x 9 3105 1200 Oct-31 Aster Turane, Withdrawals a/c Dr. To Cash (Cash fro personal use) 1200

Amounts in $ Amounts in $ Balance sheet As at Oct 31 Assets Current Assets Cash Accounts Receivable Computer Supplies Prepaid Rent Prepaid Insurance Amounts in $ Amounts in $ Liabilities Current Liabilites 8755 8250 1975 9300 8640 36920 12000 Non Current Assets Office Equipment Computer System Total Assets 5040 Owner's Equity 17040 Aster Turane Capital 53960 Total Liabilities & Equity 53960 53960

Answer 2

Please help to solve its part b