Question

Marjorie Knaus, an architect, organized Knaus Architects on January 1, 2018. During the month, Knaus Architects completed the following transactions:

A.	Issued common stock to Marjorie Knaus in exchange for $22,000.
B.	Paid January rent for office and workroom, $1,650.
C.	Purchased used automobile for $26,000, paying $4,800 cash and giving a note payable for the remainder.
D.	Purchased office and computer equipment on account, $5,600.
E.	Paid cash for supplies, $1,250.
F.	Paid cash for annual insurance policies, $3,000.
G.	Received cash from client for plans delivered, $13,450.
H.	Paid cash for miscellaneous expenses, $2,300.
I.	Paid cash to creditors on account, $3,800.
J.	Paid installment due on note payable, $700.
K.	Received invoice for blueprint service, due in February, $4,000.
L.	Recorded fees earned on plans delivered, payment to be received in February, $20,600.
M.	Paid salary of assistants, $3,500.
N.	Paid gas, oil, and repairs on automobile for January, $1,300.

	Required:
1.	Record these transactions 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 the 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.
3.	Prepare an unadjusted trial balance for Knaus Architects as of January 31, 2018.
4.	Determine the net income or net loss for January. 1. Record these transactions 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 the amount entered in the accounts, select the appropriate etter 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 A. B. C. E. J. Bal Accounts Receivable Supplies Prepaid Insurance Automobiles Equipment Notes Payable Bal. Accounts Payable

Answer 1

Cash
A	22000	B	1650
G	13450	C	4800
		E	1250
		F	3000
		H	2300
		I	3800
		J	700
		M	3500
		N	1300
Bal.	13150
Account receivable
L	20600
Supplies
E	1250
Prepaid insurance
F	3000
Automobiles
C	26000
Equipment
D	5600
Notes payable
J	700	C	21200
		Bal.	20500
Account payable
I	3800	K	4000
		D	5600
		Bal.	5800
Common stock
		A	22000
Professional fees
		G	13450
		L	20600
		Bal.	34050
Salary expense
M	3500
Blue print Expense
K	4000
Rent expense
B	1650
Automobile expense
N	1300
Miscellaneous Expense
H	2300

Unadjusted trial balance sheet
January 31, 2018
Account title	Debit	Credit
Cash	13150
Account receivable	20600
Supplies	1250
Prepaid insurance	3000
Automobiles	26000
Equipment	5600
Notes payable		20500
Account payable		5800
Common stock		22000
Professional fees		34050
Salary expense	3500
Blue print Expense	4000
Rent expense	1650
Automobile expense	1300
Miscellaneous Expense	2300
Total	82350	82350

As per matching concept, for accurate profit or loss, company required to make some adjustment entries. Here adjustment entries not provided, so we can consider above unadjusted trial balance sheet for Amount use for calculation of net income or loss
Professional fees		34050
Less: expense
Salary expense	3500
Blue print Expense	4000
Rent expense	1650
Automobile expense	1300
Miscellaneous Expense	2300
Total expense		12750
Net income		21300

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