Question

Denzel Brooks opened a Web consulting business called Venture Consultants and completed the following transactions in March.

March 1 Brooks invested $165,000 cash along with $28,000 in office equipment in the company in exchange for common stock. 2 The company prepaid $9,000 cash for six months' rent for an office. Hint: Debit Prepaid Rent for $9,000. 3 The company made credit purchases of office equipment for $4,500 and office supplies for $1,100. Payment is due within 10 days. 6 The company completed services for a client and immediately received $4,500 cash. 9 The company completed a $7,100 project for a client, who must pay within 30 days. 12 The company paid $5,600 cash to settle the account payable created on March 3. 19 The company paid $7,300 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $7,300. 22 The company received $4,800 cash as partial payment for the work completed on March 9. 25 The company completed work for another client for $4,090 on credit. 29 The company paid a $4,800 cash dividend. 30 The company purchased $2,000 of additional office supplies on credit. 31 The company paid $1,400 cash for this month's utility bill.

Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (403); and Utilities Expense (690).

2. Post the journal entries from part 1 to the ledger accounts.

3. Prepare a trial balance as of the end of March.

Answer 1

1.

Date	General Journal	Post Ref.	Debit	Credit
Mar-01	Cash	101	165000
	Office Equipment	163	28000
	Common Stock	307		193000
	(To record cash and office equipment brought in, for common stock)
Mar-02	Prepaid Rent	131	9000
	Cash	101		9000
	(To record payment of prepaid rent)
Mar-03	Office Equipment	163	4500
	Office Supplies	124	1100
	Accounts Payable	201		5600
	(To record credit purchases)
Mar-06	Cash	101	4500
	Services Revenue	403		4500
	(To record cash received for services)
Mar-09	Accounts Receivable	106	7100
	Services Revenue	403		7100
	(To record service revenue receivable)
Mar-12	Accounts Payable	201	5600
	Cash	101		5600
	(To record payment against payables)
Mar-19	Prepaid Insurance	128	7300
	Cash	101		7300
	(To record payment of prepaid insurance)
Mar-22	Cash	101	4800
	Accounts Receivable	106		4800
	(To record partial payment received against receivables)
Mar-25	Accounts Receivable	106	4090
	Services Revenue	403		4090
	(To record service revenue receivable)
Mar-29	Dividends	319	4800
	Cash	101		4800
	(To record payment of dividend)
Mar-30	Office Supplies	124	2000
	Accounts Payable	201		2000
	(To record credit purchases)
Mar-31	Utilities Expense	690	1400
	Cash	101		1400
	(To record payment of utility bill for the month)

2.

101: Cash					106: Accounts Receivable
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Mar-01	165000		165000		Mar-09	7100		7100
Mar-02		9000	156000		Mar-22		4800	2300
Mar-06	4500		160500		Mar-25	4090		6390
Mar-12		5600	154900
Mar-19		7300	147600
Mar-22	4800		152400
Mar-29		4800	147600
Mar-31		1400	146200
124: Office Supplies					128: Prepaid Insurance
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Mar-03	1100		1100		Mar-19	7300		7300
Mar-30	2000		3100
131: Prepaid Rent					163: Office Equipment
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Mar-02	9000		9000		Mar-01	28000		28000
					Mar-03	4500		32500
201: Accounts Payable					307: Common Stock
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Mar-03		5600	5600		Mar-01		193000	193000
Mar-12	5600		0
Mar-30		2000	2000
319: Dividends					403: Services Revenue
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Mar-29	4800		4800		Mar-06		4500	4500
					Mar-09		7100	11600
					Mar-25		4090	15690
690: Utilities Expense
Date	Debit	Credit	Balance
Mar-31	1400		1400

3.

VENTURE CONSULTANTS
Trial Balance
March 31
	Debit	Credit
Cash	146200
Accounts Receivable	6390
Office Supplies	3100
Prepaid Insurance	7300
Prepaid Rent	9000
Office Equipment	32500
Accounts Payable		2000
Common Stock		193000
Dividends	4800
Services Revenue		15690
Utilities Expense	1400
Totals	210690	210690