a. Pense invested $23,000 cash along with office equipment valued at $12,000 in

Question

a. Pense invested $23,000 cash along with office equipment valued at $12,000 in a new sole proprietorship named EP Consulting.
b. The company purchased land valued at $8,000 and a building valued at $33,000. The purchase is paid with $15,000 cash and a long-term note payable for $26,000.
c. The company purchased $600 of office supplies on credit.
d. Pense invested his personal automobile in the company. The automobile has a value of $7,000 and is to be used exclusively in the business.
e. The company purchased $1,100 of additional office equipment on credit.
f. The company paid $800 cash salary to an assistant.
g. The company provided services to a client and collected $2,700 cash.
h. The company paid $430 cash for this month’s utilities.
i. The company paid $600 cash to settle the account payable created in transaction c.
j. The company purchased $4,000 of new office equipment by paying $4,000 cash.
k. The company completed $2,400 of services for a client, who must pay within 30 days.
l. The company paid $800 cash salary to an assistant.
m. The company received $1,000 cash in partial payment on the receivable created in transaction k.
n. Pense withdrew $1,050 cash from the company for personal use.

Required
1. Prepare general journal entries to record these transactions (use account titles listed in part 2).
2. Open the following ledger accounts — their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (108); Office Equipment (163); Automobiles (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); E. Pense, Capital (301); E. Pense, Withdrawals (302); Fees Earned (402); Salaries Expense (601); and Utilities Expense (602). Post the journal entries from part 1 to the ledger accounts and enter the balance after each posting.
3. Prepare a trial balance as of the end of September.

Explanation / Answer

Cash $ 5,620

Accounts receivable 1,400

Office supplies 600

Office equipment 15,500

Automobiles 7,000

Building 33,000

Land 8,000

Accounts payable $ 1,100

Long-term notes payable 26,000

E. Piburn, capital 42,000

E. Piburn, withdrawals 1,050

Fees earned 5,100

Salaries expense 1,600

Utilities expense 430

Total $ 74,200 $ 74,200

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