Question

CI - Transactions of Rose Company for the month of July 2019 are presented below: July 1: Rose invested $375,000 to start his business. July 5: Purchased equipment for $45,000, paying $11,250 cash and the remaining amount will be paid after 15 days. July 10: Purchased supplies on account for $3,000. July 14: Services billed to customers amounted to $18,750. July 17: Invested additional $150,000 cash in the business. July 25: Received a bill for $1,125 for advertising of the current month. July 28: Paid $9,375 as salaries of the month. July 30: Rose withdrew $1,300 cash from the business for his personal use. Required: a- Prepare journal entries to record the above transactions. (4 marks) b- Post to the appropriate ledger accounts. (4 marks) C- Prepare the trial balance on July 31, 2019. (2 marks)

Answer 1

Date	Account	Debit	Credit
Jul 1	Cash	$ 375,000
	Common Stock		$ 375,000
Jul 5	Equipment	$    45,000
	Cash		$    11,250
	Accounts Payable		$    33,750
Jul 10	Supplies	$      3,000
	Accounts Payable		$      3,000
Jul 14	Account Receivable	$    18,750
	Revenue		$    18,750
Jul 17	Cash	$ 150,000
	Common Stock		$ 150,000
Jul 25	Advertising Expense	$      1,125
	Accounts Payable		$      1,125
Jul 28	Salaries Expense	$      9,375
	Cash		$      9,375
Jul 30	Drawings	$      1,300
	Cash		$      1,300

Cash
Date	Account	Debit	Date	Account	Credit
Jul 1	Common Stock	$ 375,000	Jul 5	Equipment	$    11,250
Jul 17	Common Stock	$ 150,000	Jul 28	Salaries Expense	$      9,375
			Jul 30	Drawings	$      1,300
			Jul 31	Balance	$ 503,075
		$ 525,000			$ 525,000
Common Stock
Date	Account	Debit	Date	Account	Credit
Jul 31	Balance	$ 525,000	Jul 1	Cash	$ 375,000
			Jul 17	Cash	$ 150,000
		$ 525,000			$ 525,000
Equipment
Date	Account	Debit	Date	Account	Credit
Jul 5	Cash	$    11,250	Jul 31	Balance	$    45,000
Jul 5	Accounts Payable	$    33,750
		$    45,000			$    45,000
Accounts Payable
Date	Account	Debit	Date	Account	Credit
Jul 31	Balance	$    37,875	Jul 5	Equipment	$    33,750
			Jul 10	Supplies	$      3,000
			Jul 25	Advertising Expense	$      1,125
		$    37,875			$    37,875
Accounts Receivable
Date	Account	Debit	Date	Account	Credit
Jul 14	Revenue	$    18,750	Jul 31	Balance	$    18,750
		$    18,750			$    18,750
Revenue
Date	Account	Debit	Date	Account	Credit
Jul 31	Balance	$    18,750	Jul 14	Accounts Receivable	$    18,750
		$    18,750			$    18,750
Supplies
Date	Account	Debit	Date	Account	Credit
Jul 10	Accounts Payable	$      3,000	Jul 31	Balance	$      3,000
		$      3,000			$      3,000
Advertising Expense
Date	Account	Debit	Date	Account	Credit
Jul 25	Accounts Payable	$      1,125	Jul 31	Balance	$      1,125
		$      1,125			$      1,125
Salaries Expense
Date	Account	Debit	Date	Account	Credit
Jul 28	Cash	$      9,375	Jul 31	Balance	$      9,375
		$      9,375			$      9,375
Drawings
Date	Account	Debit	Date	Account	Credit
Jul 30	Cash	$      1,300	Jul 31	Balance	$      1,300
		$      1,300			$      1,300

Accounts	Debit	Credit
Cash	$ 503,075
Common Stock		$ 525,000
Equipment	$    45,000
Accounts Payable		$    37,875
Accounts Receivable	$    18,750
Revenue		$    18,750
Supplies	$      3,000
Advertising Expense	$      1,125
Salaries Expense	$      9,375
Drawings	$      1,300
	$ 581,625	$ 581,625