Question

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business:

June	1	Kris transferred cash from a personal bank account to an account to be used for the business, $35,000.
	1	Paid rent for period of June 1 to end of month, $4,750.
	6	Purchased office equipment on account, $14,100.
	8	Purchased a van for $28,500 paying $4,500 cash and giving a note payable for the remainder.
	10	Purchased supplies for cash, $2,380.
	12	Received cash for job completed, $12,200.
	15	Paid annual premiums on property and casualty insurance, $3,600.
	23	Recorded jobs completed on account and sent invoices to customers, $11,900.
	24	Received an invoice for van expenses, to be paid in June, $1,500.

Enter the following transactions on Page 2 of the two-column journal:

June	29	Paid utilities expense, $3,100.
	29	Paid miscellaneous expenses, $950.
	30	Received cash from customers on account, $7,330.
	30	Paid wages of employees, $5,070.
	30	Paid creditor a portion of the amount owed for equipment purchased on June 6, $6,825.
	30	Withdrew cash for personal use, $1,600.

	Required:
1.	Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the post reference numbers until you have posted the entry to the general ledger in part 2.)
2.	Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in both the journal and the ledger as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.
3.	Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 2019.
4.	Determine the excess of revenues over expenses for June.
5.	Can you think of any reason why the amount determined in (4) might not be the net income for June?

X

Journal

1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the post reference numbers until you have posted the entry to the general ledger in part 2.)

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

PAGE 2

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11
12

4. Determine the excess of revenues over expenses for June.

Points:

0 / 1

5. Can you think of any reason why the amount determined in (4) might not be the net income for June?

Check all that apply.

Some supplies may have been used during June but no supplies expense has been recorded.

Additions to capital has been wrongly recorded as drawings.

Fees earned includes some fees earned in the month of June that have not been received.

Utilities expense includes expenses incurred for the month of June than have not yet been paid.

Points:

0.75 / 1

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Check My Work

4. Calculate Revenues - Expenses = Net Income

Answer 1

Since we only answer upto 4 subparts, we will answer first 4 subparts of given question.

1.

Date Description Debit Credit Jun-01 Cash 35,000 Capital 35,000 Jun-01 Rent expense 4,750 Cash 4,750 Jun-06 Office Equipment 14,100 Accounts Payable 14,100 Jun-08 Van 28,500 Cash 4,500 Note Payable 24,000 Jun-10 Supplies 2,380 Cash 2,380 Jun-12 Cash 12,200 Service Revenue 12,200 Jun-15 Insurance 3,600 Cash 3,600 Jun-23 Accounts receivable 11,900 Service Revenue 11,900 Jun-24 Van expense 1,500 Accounts Payable 1,500 Jun-29 Utilities expense 3,100 Miscellaneous expense 950 Cash 4,050 Jun-30 Cash 7,330 Accounts receivable 7,330 Jun-30 Wages expenses 5,070 Cash 5,070 Jun-30 Accounts Payable 6,825 Cash 6,825 Jun-30 Drawings 1,600 Cash 1,600

2.

Supplies Debit Jun-101 2,380 Credit Jun-01 Jun-12 Jun-30 Bal 2,380 Cash Debit Credit 35,000 Jun-01 4,750 12,200 Jun-08 4,500 7,330 Jun-10 2,380 Jun-15 3,600 Jun-29 4,050 Jun-30 5,070 Jun-30 6,825 Jun-30 1,600 21,755 Accounts payable Debit Credit Jun-30 6,825 Jun-06) 14,100 Jun-24 1,500 Bal 8,775 Bal Capital Debit Credit Jun-01 35,000 Accounts receivable Debit Credit Jun-23 11,900 Jun-300 7,330 Bal 35,000 Bal 4,570 Service revenue Debit Credit Jun-12 12,200 Jun-23 11,900 Rent expense Debit Jun-01 4,750 Credit Bal 4,750 Bal 24,100 Wages expenses Debit Credit Jun-30 5,070 Office Equipment Debit Credit 14,100 Jun-06 Bal 14,100 Bal 5,070

Van Debit Jun-08) 28,500 Credit Note Payable Debit Credit Jun-08 24,000 Bal 28,500 Bal 24,000 Van Expense Debit Jun-24 1,500 Insurance Debit 3,600 Credit Credit Jun-15 Bal 1,500 Bal 3,600 Drawings Debit 1,600 Miscellaneous expense Debit Credit Jun-29 950 Credit Jun-30 Bal 950 Bal 1,600 Utilities expense Debit Credit Jun-29 3,100 Bal 3,100

3.

Credit 8,775 35,000 24,100 Trial balance Particulars Debit Cash 21,755 Supplies 2,380 Accounts payable Accounts receivable 4,570 Capital Rent expense 4,750 Service Revenue Wages expenses 5,070 Office Equipment 14,100 Van 28,500 Note Payable Van Expense 1,500 Insurance 3,600 Drawings 1,600 Miscellaneous expense 950 Utilities expense 3,100 Totals 91,875 24,000 91,875

4.

Determine the excess of Revnue over expenses Service Revenue 24,100 Less: Expenses Rent expense 4,750 Wages expenses 5,070 Van Expense 1,500 Insurance 3,600 Miscellaneous expense 950 Utilities expense 3100 Total expenses -18,970 Net Income 5,130

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