Question

Chapter 2 Analyzing Transactions $3,550 Excel General Ledger Show Me How PR 2-2A Journal entries and trial balance OBJ. 1, 2, 3, 4 On January 1, 2019, Sharon Matthews established TH-City Realty, which completed the following transactions during the month: a. Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $40,000. b. Paid rent on office and equipment for the month, $6,000. c. Purchased supplies on account, $3,200. d. Paid creditor on account, $1,750. e. Earned fees, receiving cash, $18,250. f. Paid automobile expenses (including rental charge) for month, $1,880, and miscel- laneous expenses, $420. g. Paid office salaries, $5,000. h. Determined that the cost of supplies used was $1,400. i. Withdrew cash for personal use, $2,000. Instructions 1. Journalize entries for transactions (a) through C), using the following account titles: Cash; Supplies; Accounts Payable: Sharon Matthews, Capital; Sharon Matthews, Draw- ing: Fees Earned; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. Explanations may be omitted, 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of January 31, 2019. 4. Determine the following: Amount of total revenue recorded in the ledger, b. Amount of total expenses recorded in the ledger. C Amount of net income for January, Determine the increase or decrease in owner's equity for January

Answer 1

1 Journal Entry Particulars Transaction no Debit Credit a Dr $40000 Cash A/C To Sharon Mathhews Capital A/C (Started business with cash) Cr $40000 b Dr $6000 Rent expenses A/C To Cash A/C (Being rent paid) Cr $6000 C Dr $3200 Supplies A/C To Account payable A/C (Being supplies purchased on account) Cr $3200 d Dr $1750 Account payable A/C To Cash (Being Creditor paid in cash) Cr $1750

ID Dr $18250 Cash A/C To Fees Earned A/C (Being Fees earned in cash) Cr $18250 f $1880 Automobile expenses A/C Dr To Cash A/C Cr (Being automobile expenses paid in cash) $1880 f $420 Miscellaneous expenses A/C Dr To Cash A/C (Being Miscellaneous expenses are paid) Cr $420 8 Dr $5000 Office salaries expenses A/C To Cash A/C (Being office salaries expenses paid) Cr $5000 h Dr $1400 Cost of supplies used A/C To Supplies A/C (Being supplies used) Cr $1400

Dr $2000 Sharon Mathhews Capital A/C To Cash A/C (Being cash withdrawn for personal use) Cr $2000

2 Dr Tr no Particulars To Balance b/d To Sharon Mathhews Capital To Fees Earned a T- Accounts Cash A/C Amount ($) Tr no 0 b 40000 d 18250 f f 8 i e Cr Particulars Amount ($) By Rent expenses 6000 By Account Payable 1750 By Automobile expenses 1880 By Miscellanous expenses 420 By Office salaies expenses 5000 By Sharon Mathhews Capital 2000 By Balance c/d 41200 58250 58250 Dr Cr Tr no i Sharon Mathhews Capital A/C Amount ($) Tr no 2000 38000 Particulars To Cash To Balance c/d Amount ($) Particulars To Balance b/d By cash 0 a 40000 40000 40000

Dr Tr no Particulars Cr Amount ($) Particulars To Balance b/d To Cash Rent expenses A/C Amount ($) Tr no 0 6000 6000 b By Balance c/d 6000 6000 Dr Tr no Supplies A/C Amount ($) h Particulars To Balance b/d To Account Payable TƯng Cr Amount ($) 1400 1800 Particulars Cost of supplies used By Balance c/d 0 с 3200 3200 3200 Dr Tr no d Particulars To Cash To Balance c/d Account Payable A/C Amount ($) It no 1750 Particulars By Balance b/d By Supplies Cr Amount ($) 0 с 3200 1450 3200 3200

Dr Fees Earned A/C Amount ($) Tr no Tr no Particulars Particulars By Balance b/d By Cash Cr Amount ($) 0 18250 18250 To Balance c/d e 18250 18250 Dr Tr no Automobile expenses Amount ($) TƯng 0 1880 Particulars Cr Amount ($) Particulars By Balance b/d To Cash By Balance c/d 1880 1880 1880 Dr Cr Tr no Miscellanous expenses Amount ($) Tr no 0 Particulars Particulars By Balance b/d To Cash Amount ($) f 420 By Balance c/d 420 420 420

Dr Cr Amount ($) Tr no Particulars Particulars By Balance b/d To Cash Office salaries expenses Amount ($) Tr no 0 5000 5000 8 By Balance c/d 5000 5000 Dr Cr Tr no Cost of supplies used Amount ($) Tr no 0 Particulars Particulars By Balance b/d To Supplies Amount ($) h 1400 By Balance c/d 1400 1400 1400

3 Unadjusted Trial Balance as of January 2019 Account Title Debit ($) Credit ($) Cash 41200 Sharon Mathhews Capital 38000 Rent expenses 6000 Supplies 1800 Account Payable 1450 Fees Earned 18250 Automobile expenses 1880 Miscellanous exenses 420 Office salary expenses 5000 Cost of supplies used 1400 57700 57700

4 Total revenue earned = Fees Earned Total revenue earned = $18250 Amount ($) 6000 1880 Total Expenses Rent Automobile Miscellanous Office salaries Cost of supplies used Total Expenses 420 5000 1400 14700 Net Income for January = Total revenue - Total expenses $18250-$14700 $3550 Net Income for January= $3550

5 Net Decrease in owner capital = capital - drawing $40000-$2000 $38000 Net Decrease in owner capital = $38000