Question

Using transactions provided in the worksheet below, complete the following: (1) create journal entries for your company using the template provided; and (2) complete the Trial Balance at January 31, 2018 using the same template.

Transactions

June

1st

ABC Company receives $50,000 cash from the owner as a contribution.

June

3rd

ABC Company pays $32,000 cash for equipment.

June

5th

ABC Company purchases $15,000 of merchandise inventory on credit from a supplier.

June

8th

ABC Company pays $ 800 in cash for employee salary.

June

11th

ABC Company pays $15,000 cash to settle the account payable created on June 5th.

June

15th

The owner withdraws $1,000 cash from ABC Company for personal use.

June

19th

ABC Company sold merchandise inventory that had cost $8,000 for $11,000 cash (Note: This transaction will require two journal entries).

June

24th

ABC Company pays $560 cash for this month's utilities.

June

27th

ABC Company pays $6,000 cash (insurance premium) for a 6-month insurance policy. Coverage begins July 1st.

June

30th

ABC Company pays $2,000 cash for rent.

Answer 1

Answer 1.

General Journal Debit Credit Date Cash June 01 50,000 Owner's Capital 50,000 June 03 Equipment 32,000 Cash 32,000 Merchandise Inventory June 05 15,000 Accounts Payable 15,000 June 08 Salaries Expense 800 Cash 800 Accounts Payable June 11 15,000 Cash 15,000 Owner's Drawing June 15 1,000 Cash 1,000 Cash June 19 11,000 Sales Revenue 11,000 Cost of Goods Sold 8,000 Merchandise Inventory 8,000 Utilities Expense June 24 560 Cash 560 Prepaid Insurance June 27 6,000 Cash 6,000 Rent Expense June 30 2,000 Cash 2,000

Answer 2.

ABC COMPANY Trial Balance June 30, 2018 Credit Debit Accounts Cash Merchandise Inventory Prepaid Insurance Equipment Owner's Capital Owner's Drawing Sales Revenue Cost of Goods Sold Salaries Expense Utilities Expense Rent Expense Totals 3,640 $ $ 7,000 6,000 $ 32,000 50,000 1,000 11,000 $ 8,000 $ $ 800 560 $ 61,000 $ 2,000 61,000