Question

outdoors. Matt has decided to incorporate the business to limit his legal liability. The business began operations April 1, 2019, and will have a May 31 year end. April 1 Received $32,000 cash to begin the company in exchange for 16,000 shares of $2 par value common stock. 2 Signed a lease for space on the beach and paid $1,200 for the first month's rent. 2 Purchased computer equipment for $2,800. 2 Hired Katie Weekly to help out with rentals and tours at $15/hr. 3 Purchased kayaks for $6,000 on account. 4 Purchased office supplies on account for $340. 7 Rented kayaks to a group of students for $1,300 cash. 15 Paid wages of $1,200 to Katie. 15 Provided tour and kayaks to AP biology class at local high school on account, $2,400. 16 Received $120 bill from Virginia Power for connection fee. 20 Paid local newspaper $300 for ad for April. 22 Received $500 cash for kayak rental to vacationers. 25 Paid $160 bill for cell phone. 28 Paid $1,000 on account related to April 3 purchase on account. 28 Provided sunset kayak tour and received $350 cash. 30 Received $2,400 from school system for April 15 tour on account. 30 Rented kayaks on account to Brock Environmental Center, $2,100. 30 Paid wages to Katie in the amount of $1,050. May 1 Matt contributed land on the river worth $250,000 and a small building to use as a rent office worth $80,000 in exchange for 20,000 shares of $2 par value common stock. (Cre Common stock $40,000, and Paid In Capital in Excess of Par $290,000.) 1 Prepaid $4,800 for four months' rent on beach space. 2 Purchased additional kayaks by signing a note payable for $7,700. 2 Received $250 electric bill from Virginia Power. 4 Bought office supplies on account for $260. 4 Rented kayaks to school group for $1,800, but will be paid next month. 5 Received $1,900 cash for kayak rental to customers. 7 Purchased paddle boards for $ 3,600 on account. 8 Received payment from Brock Environmental Center for April 30 rental. 8 Received $3,750 cash for kayak and paddle board rentals to customers. 8 Paid $4,800 for a two year insurance policy that began April 1. 9 Received $850 cash for paddle board rentals. 11 Received a $1,500 deposit from the Botanical Gardens for a sunset paddle board tou scheduled for June 7. 11 Paid Virginia Power for bill dated April 16. 15 Paid Katie for hours worked, $1,200. 16 Paid $5,000 balance on April 3 purchase. 18 Paid $600 on account for purchase of office supplies. 20 Paid local newspaper $300 for ad for May.

Answer 1

1. Journal Entries

Date	Account Name	Debit	Credit
2019
April 1	Cash	32,000
	Common Stock		32,000
2	Rent Expense	1,200
	Cash		1,200
2	Computer- Equipment	2,800
	Cash		2,800
3	Kayak-Equipment	6,000
	Account Payable		6,000
4	Office Supplies	340
	Account Payable		340
7	Cash	1,300
	Rental Revenue		1,300
15	Wage Expense	1,200
	Cash		1,200
15	Account Receivable	2,400
	Rental Revenue		2,400
16	Utilities Expense	120
	Utilities Expense Payable		120
20	Advertisement Expense	300
	Cash		300
22	Cash	500
	Rental Revenue		500
25	Telephone Expense	160
	Cash		160
28	Account Payable	1,000
	Cash		1,000
28	Cash	350
	Rental Revenue		350
30	Cash	2,400
	Account Receivable		2,400
30	Account Receivable	2,100
	Rental Revenue		2,100
30	Wage Expense	1,050
	Cash		1,050
May 1	Land	2,50,000
	Building	80,000
	Common Stock		40,000
	Paid in Capital in Excess of Par		290,000
1	Prepaid Rent	4,800
	Cash		4,800
2	Kayaks-Equipment	7,700
	Note Payable		7,700
2	Utilities Expense	250
	Utilities Expense Payable		250
4	Office Supplies	260
	Account Payable		260
4	Account Receivable	1,800
	Rental Revenue		1,,800
5	Cash	1,900
	Rental Revenue		1,900
7	Paddle Board-Equipment	3,600
	Account Payable		3,600
8	Cash	2,100
	Account Receivable		2,100
8	Cash	3,750
	Rental Revenue		3,750
8	Insurance Expense	200
	Prepaid Insurance	4,600
	Cash		4,800
9	Cash	850
	Rental Revenue		850
11	Utilities Expense Payable	120
	Cash		120
11	Cash	1,500
	Unearned Revenue		1,500
15	Wage Expense	1,200
	Cash		1,200
16	Account Payable	5,000
	Cash		5,000
18	Account Payable	600
	Cash		600
20	Advertisement Expense	300
	Cash		300
21	Account Receivable	2,700
	Rental Revenue		2,700
22	Cash	980
	Rental Revenue		980
26	Telephone Expense	180
	Cash		180
28	Account Payable	3,600
	Cash		3,600
28	Cash	6,800
	Rental Revenue		6,800
29	Note Payable	1,100
	Cash		1,100
31	Wage Expense	1,380
	Cash		1,380

Cash
Account Name	Debit	Credit	Balance
	32000		32000
		1200	30800
		2800	28000
	1300		29300
		1200	28100
		300	27800
	500		28300
		160	28140
		1000	27140
	350		27490
	2400		29890
		1050	28840
		4800	24040
	1900		25940
	2100		28040
	3750		31790
		200	31590
		4600	26990
	850		27840
		120	27720
	1500		29220
		1200	28020
		5000	23020
		600	22420
		300	22120
	980		23100
		180	22920
		3600	19320
	6800		26120
		1100	25020
		1380	23,640

2. General Ledger

Common Stock
Account Name	Debit	Credit	Balance
Cash		32,000	32,000
Land And Building		40,000	72,000
Paid in Capital in Excess of Par
Land and Building		290,000	290,000
Account Receivable
Rental Revenue	2,400		2,400
Cash		2,400	0
Rental Revenue	2,100		2,100
Rental Revenue	1,800		3,900
Cash		2,100	1,800
Rental Revenue	2,700		4,500
Rent Expense
Cash	1,200		1,200
Computer Equipment
Cash	2,800		2,800
Kayaks Equipment
Account Payable	6,000		6,000
Account Payable	7,700		13,700
Account Payable
Kayaks Equipment		6,000	6,000
Office supplies		340	6,340
Cash	1,000		5,340
Office Supplies		260	5,600
Paddle Board Equipment		3,600	9,200
Cash	,5000		4,200
Cash	600		3,600
Cash	3,600		0
Office Supplies
Account Payable	340		340
Account Payable	260		600
Rental Revenue
Cash		1,300	1,300
A/R		2,400	3,700
Cash		500	4,200
Cash		350	4,550
A/R		2,100	6,650
Cash		1,800	8,400
AR		1,900	10,300
Cash		3,750	14,050
Cash		850	14,900
A/R		2,700	17,600
Cash		980	18580
Cash		6,800	25,380
Advertisement Expense
Cash	300		300
Cash	300		600

Work Sheet

Account Tittle or Name	Un-adjusted Trial Balance		Adjustment
	Debit	Credit	Debit	Credit
Cash	23,640
Account Receivable	4,500
Prepaid Insurance	4,600
Prepaid Rent	4,800
Office Supplies	600
Land	250,000
Building	80,000
Accumulated Depreciation-Building
Computer Equipment	2,800
Accumulated Depreciation-Computer
Kayaks-Equipment	13,700
Accumulated Depreciation-Kayaks
Paddle Board-Equipment	3,600
Accumulated Depreciation-Paddle Board
Account Payable		0
Wage Payable		0
Note Payable		6,600
Unearned Revenue		1,500
Paid in Capital in excess of Par		290,000
Common Stock		32,000
Retained Earning		0
Rental Revenue		25,380
Advertising Expense	600
Wage Expense	4,830
Telephone Expense	340
Rent Expense	1,200
Insurance Expense	200
Utilities Expense	370
Depreciation Expense
Supplies Expense