Karla Tanner opens a Web consulting business called Linkworks and completes the

Question

Karla Tanner opens a Web consulting business called Linkworks and completes the following transactions in its first month of operations April 1 Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company 2 The company prepaid $9,000 cash for twelve months' rent for office space. (Hint: Debit Prepaid Rent for $9, 000.) 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment ia due within 10 days. 6 The company completed services for a client and inmediately received $4,000 cash. 9 The company completed a $6,000 project for a client, vho must pay within 30 days 13 The company paid $11,600 cash to settle the account payable created on April 3. 19 The company paid $2.400 cash for the premiun on a 12-nonth insurance policy. tRintr Dabit Prepaid Tnaurance for $2.400.) 22 The company received $4, 400 cash as partial payment for the work completed on Apri1 9. 25 The company completed work for another client for $2,890 on credit. 28 Tanner withdrew $5,500 cash fron the company for personal use. 29 The company purchased $600 of additional oftice supplies on credit. 30 The company paid $435 cash for this month:s utility bill. Required: 1. Prepare Supplies (124); Prepaid Insurance (128): Prepaid Rent (13): Office Equipment (163): Accounts Payable (201% K Tanner Capital (301: K Tanner, Withdrawals (302): Services Revenue (403): and Utäities Expense (690) 2. Post the journal entries from part 1 to the ledger accounts 3. Prepare a trial balance as of April 30 general journal entries to record these transactions using the following titles: Cash (101, Accounts Receivable (06 Office

Explanation / Answer

1 General Journal entries Date Account titles Debit Credit 1-Apr Cash $80,000 Office Equipment $26,000 K. Tanner, Capital $106,000 2-Apr Prepaid rent $9,000 Cash $9,000 3-Apr Office equipment $8,000 Office Supplies $3,600 Accounts Payable $11,600 6-Apr Cash $4,000 Services Revenue $4,000 9-Apr Accounts Receivable $6,000 Services Revenue $6,000 13-Apr Accounts Payable $11,600 Cash $11,600 19-Apr Prepaid Insurance $2,400 Cash $2,400 22-Apr Cash $4,400 Accounts receivable $4,400 25-Apr Accounts receivable $2,890 Services Revenue $2,890 28-Apr K. Tanner, Withdrawals $5,500 Cash $5,500 29-Apr Office Supplies $600 Accounts Payable $600 30-Apr Utilities Expense $435 Cash $435 2 Journal entries post to general ledger Cash Account no. 101 Office Equipment Account no. 163 1-Apr $80,000 2-Apr $9,000 1-Apr $26,000 6-Apr $4,000 13-Apr $11,600 3-Apr $8,000 22-Apr $4,400 19-Apr $2,400 28-Apr $5,500 30-Apr $435 30-Apr $59,465 30-Apr $34,000 Accounts receivable Account no. 106 Office Supplies Account no. 124 9-Apr $6,000 22-Apr $4,400 3-Apr $3,600 25-Apr $2,890 29-Apr $600 30-Apr $4,490 30-Apr $4,200 Prepaid Insurance Account no. 128 Prepaid Rent Account no. 131 19-Apr $2,400 2-Apr $9,000 30-Apr $2,400 30-Apr $9,000 Accounts Payable Account no. 201 K.Tanner, Capital Account no. 301 13-Apr $11,600 3-Apr $11,600 1-Apr $106,000 29-Apr $600 30-Apr $600 30-Apr $106,000 K.Tanner, Withdrawals Account no. 302 Services Revenue Account no. 403 28-Apr $5,500 6-Apr $4,000 9-Apr $6,000 25-Apr $2,890 30-Apr $5,500 30-Apr $12,890 Utilities Expense Account no. 690 30-Apr $435 30-Apr $435 3 Trail Balance Accounts Titles Debit Credit Cash $59,465 Accounts Receivable $4,490 Office Supplies $4,200 Prepaid Insurance $2,400 Prepaid Rent $9,000 Office Equipment $34,000 Accounts Payable $600 K.Tanner, Capital $106,000 K.Tanner, Withdrawals $5,500 Services Revenue $12,890 Utilities Expense $435 $119,490 $119,490

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