Question

On November 1, 2018, Kris Lehman established an interior decorating business, Modern Designs. During the month, Kris completed the following transactions related to the business:

Nov.	1	Kris transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $36,000.
	1	Paid rent for period of November 1 to end of month, $4,000.
	6	Purchased office equipment on account, $16,000.
	8	Purchased a truck for $43,000 paying $4,300 cash and giving a note payable for the remainder.
	10	Purchased supplies for cash, $1,860.
	12	Received cash for job completed, $8,000.
	15	Paid annual premiums on property and casualty insurance, $2,400.
	23	Recorded jobs completed on account and sent invoices to customers, $15,500.
	24	Received an invoice for truck expenses, to be paid in November, $1,250.

Enter the following transactions on Page 2 of the two-column journal:

Nov.	29	Paid utilities expense, $3,660.
	29	Paid miscellaneous expenses, $1,700.
	30	Received cash from customers on account, $10,500.
	30	Paid wages of employees, $4,750.
	30	Paid creditor a portion of the amount owed for equipment purchased on November 6, $4,000.
	30	Paid dividends, $1,600.

2.	Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in both the journal and the ledger as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

CHART OF ACCOUNTS
Modern Designs
General Ledger
ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Equipment 18 Truck LIABILITIES 21 Notes Payable 22 Accounts Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends	REVENUE 41 Fees Earned EXPENSES 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Truck Expense 59 Miscellaneous Expense

LEDGER

Account: Cash Account No.11

	DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
						DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12

Accounts receivable account nr 12

DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
					DEBIT	CREDIT
1
2

Supplies 13

DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
					DEBIT	CREDIT
1

prepaid insurance 14

DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
					DEBIT	CREDIT
1

Equipment 16

1 row like above

Truck 18

1 row

Notes Payable 21

1 row

Accounts Payable 22

3 rows

Common Stock 31

1 row

Dividends 33

1row

Fees Earned 41

3 rows

Wages Expense 51

1row

Rent Expense 53

1row

Utilities Expense 54

1row

Truck Expense 55

1row

Miscellaneous Expense 59

1row

Answer 1

Answer	Cash Account
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	01st Nov	Common Stock	$           36,000		$          36,000
	1st Nov	Rent		$           4,000	$          32,000
	8th Nov	Truck		$           4,300	$          27,700
	10th Nov	Supplies		$           1,860	$          25,840
	12th Nov	Fees	$              8,000		$          33,840
	15th Nov	Insurance Premium		$           2,400	$          31,440
	29th Nov	Utility expense		$           3,660	$          27,780
	29th Nov	Miscellaneous Expense		$           1,700	$          26,080
	30th Nov	Accounts Receivable	$           10,500		$          36,580
	30th Nov	Wages expense		$           4,750	$          31,830
	30th Nov	Creditor Equipment		$           4,000	$          27,830
	30th Nov	Dividends		$           1,600	$          26,230
	Common Stock
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	01st Nov	Cash		$         36,000		$          36,000
	Rent
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	01st Nov	Cash	$              4,000		$            4,000
	Office Equipment
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	6th nov	Creditor-equipment	$           16,000		$          16,000
	Truck
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	8th Nov	Cash	$              4,300		$            4,300
	8th Nov	Notes Payable	$           38,700		$          43,000
	Notes Payable
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	8th Nov	Truck		$         38,700		$          38,700
	Supplies
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	10th Nov	Cash	$              1,860		$            1,860
	Fees
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	12th Nov	Cash		$           8,000		$            8,000
	23rd Nov	Accounts Receivable		$         15,500		$          23,500
	Insurance Premium
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	10th Nov	Cash	$              2,400		$            2,400
	Accounts Receivable
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	23rd Nov	Fees	$           15,500		$          15,500
	30th Nov	Cash		$         10,500	$            5,000
	Truck Expenses
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	24th Nov	Accounts Payable	$              1,250		$            1,250
	Accounts Payable
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	24th Nov	Truck Expenses		$           1,250		$            1,250
	Utility Expenses
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	29th Nov	Cash	$              3,660		$            3,660
	Miscellaneous Expenses
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	29th Nov	Cash	$              1,700		$            1,700
	Wages Expenses
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	30th Nov	Cash	$              4,750		$            4,750
	Creditor-Equipment
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	6th Nov	Office Equipment		$         16,000		$          16,000
	30th Nov	Cash	$              4,000			$          12,000
	Dividends
	Date	Item	Debit	Credit	Balance
					Debit	Credit
	30th Nov	Cash	$              1,600		$            1,600