Question

1. Larry Matt, Inc. completed these transactions during December of the current year: Began a financial services practice by investing $15,000 cash and office equipment having a $5,000 value in Dec. 1 exchange for common stock. 2 Purchased $1,200 of office equipment on credit. 3 Purchased $300 of office supplies on credit. 4 Completed work for a client and immediately received a payment of $900 cash. 8 Completed work for Precept Paper Co. on credit, $1,700. 10 Paid cash for the supplies purchased on credit on December 3. 14 Paid cash for the annual $960 premium on an insurance policy. 18 Received cash as payment in full from Precept Paper Co. for the work completed on December 8. 27 The company paid $650 cash in dividends to the owner. (sole shareholder) 30 Paid $175 cash for the December utility bills. 30 Received $2,000 cash from a client for financial services to be completed next year. Prepare general journal entries to record these transactions, post to T-Accounts, then prepare a Trial Balance.

Answer 1

Credit Date Particulars 01-Dec Cash Equipment Capital (being cash and equipment brought in) Debit $15,000 $5,000 $20,000 $1,200 02-Dec Equipment Account payable (being equipment purchased) $1,200 $300 03-Dec Office supplies Account Payable (being office supplies purchased on credit) $300 $900 04-Dec Cash Service Revenue (being cash received) $900 $1,700 08-Dec Percept Paper Co. Service Revenue (being service provided) $1,700 $300 10-Dec Account payable Cash (being cash paid) $300 $960 14-Dec Insurance Cash (being premium paid) $960

$1,700 18-Dec Cash Percept Paper Co (being cash received) $1,700 $650 27-Dec Dividend Payable Cash (being dividend paid) $650 $175 30-Dec Utility Bills Cash (being cash paid) $175 $2,000 30-Dec Cash Unearned Revenue (being cash received in advance) $2,000

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