For each transaction below, record journal entries in proper format before you p
ID: 2396386 • Letter: F
Question
For each transaction below, record journal entries in proper format before you post to the ledger.
Use the following accounts: Cash, Accounts Payable, Accounts Receivable, Equipment, Supplies, Capital, Drawing, Repair Revenue, Prepaid Insurance, Wages Expense, Utilities Expense, Depreciation Expense, Accumulated Depreciation, Insurance Expense, Supplies Expense, Wages Payable
Note: These Accounts are already set up for you in the Chart of Accounts in the Excel Document that has been provided.
October Transactions
October 1 The owner invested $40,000 cash in the business
October 1 Purchased equipment for $15,000 on account.
October 1 Purchased a 4-year insurance policy to insure the business for $2000
for cash.
October 2 Paid $2000 cash for supplies.
October 4 Received $3,000 cash from customers for services rendered
October 14 Paid for the equipment purchase on October 1.
October 15 Paid wages $1,750
October 16 Performed services worth $4,500 for credit customers
October 20 Received $1,400 cash from customers previously billed on account
October 22 The owner withdrew $3,400 cash for personal use
October 31 Paid utility bill for October $500.
End of Month Adjustments—October 31
1. Assume that the equipment purchased on October 1 has no trade-in value and an expected life of 5 years. Prepare the adjusting entry for the month of October.
2. Prepare the adjusting entry for the insurance policy purchased on October 1 for the month of October.
3. After taking a physical count of the supplies, you discover that there are actually $1,400 of supplies left in the supply room. Prepare the adjusting entry for supplies for the month of October.
4. Wages for October 29 – 31 are unpaid at the end of the month. Normally, wages for a regular 5-day work week total $5,000. Prepare the adjusting entry for unpaid wages for the month of October.
Note: The Financial Statements will be updated automatically after you have entered your adjusting entries.
Additionally, you will need to refer to your General ledger to assist you with calculating the adjusting entries.
Financial Statements
1. Prepare an Income Statement for the month of October.
2. Prepare an Equity Statement for the month of October.
3. Prepare a Balance Sheet for the month of October.
Note: The Financial Statements will be updated automatically once you have entered your adjusting entries into the general journal.
Closing Entries
1. Prepare the closing entries for the month of October.
Note: You will need to refer to the General Ledger to assist you with completing the closing entries.
Problem Name GENERAL JOURNAL Page 1 CREDIT DATE DESCRIPTION DEBIT 1-Oct 1-Oct 1-Oct 2-0ct 4-0ct 14-0ct 15-0ct 16-0ct 20-0ct 22-0ct 31-0ctExplanation / Answer
Journal Entries Date Account Title Debit Credit Oct.1 Cash 40000 Capital 40000 Equipment 15000 Accounts Payable 15000 Insurance expense 2000 Cash 2000 Oct.2 Supplies 2000 Cash 2000 Oct.4 Cash 3000 Repair Revenue 3000 Oct.14 Accounts Payable 15000 Cash 15000 Oct.15 Wages Expense 1750 Cash 1750 Oct.16 Accounts receivable 4500 Repair Revenue 4500 Oct.20 Cash 1400 Accounts receivable 1400 Oct.22 Drawing 3400 Cash 3400 Oct.31 Utilities Expense 500 Cash 500 Adjusting Entries: 1 Depreciation Expense 250 Accumulated Depreciation 250 (15000/5/12) 2 Prepaid Insurance 1958 Insurance Expense 1958 2000-(2000/4/12) 3 Supplies Expense 600 Supplies 600 (2000-1400) 4 Wages expense 3000 Wages Payable 3000 (5000/5*3) 94358 94358 LEDGER ACCOUNTS Date Account Title Debit Credit Net Balances Debit Credit Oct.1 Accounts Payable 15000 Oct.14 Accounts Payable 15000 0 Oct.16 Accounts receivable 4500 Oct.20 Accounts receivable 1400 3100 1 Accumulated Depreciation 250 250 Oct.1 Capital 40000 40000 Oct.1 Cash 40000 Oct.1 Cash 2000 Oct.2 Cash 2000 Oct.4 Cash 3000 Oct.14 Cash 15000 Oct.15 Cash 1750 Oct.20 Cash 1400 Oct.22 Cash 3400 Oct.31 Cash 500 19750 1 Depreciation Expense 250 250 Oct.22 Drawing 3400 3400 Oct.1 Equipment 15000 15000 Oct.1 Insurance expense 2000 2 Insurance Expense 1958 42 2 Prepaid Insurance 1958 1958 Oct.4 Repair Revenue 3000 Oct.16 Repair Revenue 4500 7500 Oct.2 Supplies 2000 3 Supplies 600 1400 3 Supplies Expense 600 600 Oct.31 Utilities Expense 500 500 Oct.15 Wages Expense 1750 4 Wages expense 3000 4750 4 Wages Payable 3000 3000 94358 94358 50750 50750 Trial Balance As at Oct. 31 Debit Credit Cash 19750 Accounts receivable 3100 Supplies 1400 Prepaid Insurance 1958 Equipment 15000 Accumulated Depreciation 250 Accounts Payable 0 Wages Payable 3000 Capital 40000 Drawing 3400 Repair Revenue 7500 Insurance Expense 42 Depreciation Expense 250 Supplies Expense 600 Utilities Expense 500 Wages expense 4750 TOTAL 50750 50750 Income Statement For the month ended October Revenues Repair Revenue 7500 Total revenues 7500 Expenses Supplies Expense 600 Depreciation Expense 250 Insurance Expense 42 Wages expense 4750 Utilities Expense 500 Total expenses 6142 Net Income 1358 Equity Statement For the month ended Oct.31 Beginning Capital 0 Add:Net Income( Retained Earnings) 1358 Add: Investment 40000 Less: Drawing 3400 Ending balance 37958 Balance Sheet 10/31/2015 Assets Cash 19750 Accounts Receivable 3100 Supplies 1400 Prepaid Insurance 1958 Equipment 15000 Less:Accumulated depreciation -250.0 Total assets 40958 Liabilities Accounts payable 0 Wages payable 3000 Total Equity 37958 Total Liabilities & Equity 40958 Closing Entries Repair Revenue 7500 Income summary 7500 Income summary 6142 Supplies Expense 600 Depreciation Expense 250 Insurance Expense 42 Wages expense 4750 Utilities Expense 500 Income summary 1358 Retained Earnings 1358 Closing Trial Balance As at Oct. 31 Debit Credit Cash 19750 Accounts receivable 3100 Supplies 1400 Prepaid Insurance 1958 Equipment 15000 Accumulated Depreciation 250 Accounts Payable 0 Wages Payable 3000 Capital 40000 Drawing 3400 Retained Earnings 1358 TOTAL 44608 44608
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