Question

Entries into T accounts and Trial Balance

Marjorie Knaus, an architect, organized Knaus Architects on January 1, 20Y4. During the month, Knaus Architects completed the following transactions:

1. Issued common stock to Marjorie Knaus in exchange for $30,000.
2. Paid January rent for office and workroom, $2,500.
3. Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder.
4. Purchased office and computer equipment on account, $8,000.
5. Paid cash for supplies, $2,100.
6. Paid cash for annual insurance policies, $3,600.
7. Received cash from client for plans delivered, $9,000.
8. Paid cash for miscellaneous expenses, $2,600.
9. Paid cash to creditors on account, $4,000.
10. Paid installment due on note payable, $1,875.
11. Received invoice for blueprint service, due in February, $5,500.
12. Recorded fees earned on plans delivered, payment to be received in February, $31,400.
13. Paid salary of assistants, $6,000.
14. Paid gas, oil, and repairs on automobile for January, $1,300.

Required:

1. Record the above transactions (in chronological order) directly in the following T accounts, without journalizing: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes Payable, Accounts Payable, Common Stock, Professional Fees, Salary Expense, Blueprint Expense, Rent Expense, Automobile Expense, Miscellaneous Expense. To the left of each amount entered in the accounts, select the appropriate letter to identify the transaction.

2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.

Cash
Bal.

Accounts Receivable

Supplies

Prepaid Insurance

Automobiles

Equipment

Notes Payable
		Bal.

Accounts Payable
		Bal.

Common Stock

Professional Fees
		Bal.

Salary Expense

Blueprint Expense

Rent Expense

Automobile Expense

Miscellaneous Expense

3. Prepare an unadjusted trial balance for Knaus Architects as of January 31, 20Y4. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. If an amount box does not require an entry, leave it blank.

Knaus Architects
Unadjusted Trial Balance
January 31, 20Y4
	Debit Balances	Credit Balances

4. Determine the net income or net loss for January.
   $

Answer 1

Part 1&2 a Cash 30000 b 9000 C e f h i j 2500 6000 2100 3600 2600 4000 1875 6000 1300 m n Bal. 9025 Accounts Receivable 31400 Supplies 21001 е Prepaid Insurance 3600 f Automobiles 28500 с d Equipment 8000

j Notes Payable 1875 C 22500 Bal. 20625 i Accounts Payable 4000 d 8000 K 5500 Bal. 9500 Common Stock 30000 a Professional Fees B 9000 31400 Bal. 40400 Salary Expense 6000 m Blueprint Expense 5500 k Rent Expense 2500 b Automobile Expense 1300 n Miscellaneous Expense 2600 h

Part 3: Knaus Architects Unadjusted Trial Balance January 31, 2014 Account title 1 Cash 2 Accounts Receivable 3 Supplies 4 Prepaid Insurance 5 Automobiles 6 Equipment 7 Notes Payable 8 Accounts Payable 9 Common Stock 10 Professional Fees 11 Salary Expense 12 Blueprint Expense 13 Rent Expense 14 Automobile Expense 15 Miscellaneous Expense 16 Total Debit Balances Credit Balances 9025 31400 2100 3600 28500 8000 20625 9500 30000 40400 6000 5500 2500 1300 2600 100525 100525 40400 Part 4: Professional Fees Expenses: Salary Expense Blueprint Expense Rent Expense Automobile Expense Miscellaneous Expense Total expenses Net income 6000 5500 2500 1300 2600 17900 22500