NAME Principles of Accounting Quiz 2 Chapter 2 10 Points Transactions for Giles

Question

NAME Principles of Accounting Quiz 2 Chapter 2 10 Points Transactions for Giles Company for the month of May are presented below. On the form provided on the following page, journalize these transactions in general journal form Identify each transaction by number. Omit explanations. A partial chart of accounts is provided Cash Accounts Receivable Supplies Prepaid Insurance Prepaid Rent Equipment Notes Payable Accounts Payable Unearned Service Revenue Common Stock Retained Earnings Dividends Service Revenue Insurance Expense Advertising Expense Wages Expense Rent Expense After you have journalized the transactions, post those entries which affect cash into the T account form provided and calculate the ending balance in the cash account. 1. The Company issues stock in exchange for $100,000. 2. Purchased equipment costing $18,000 for $3,000 cash and the remainder on credit. 3. Paid $500 for current month's rent 4. Purchased supplies on credit for $500. 5. Paid $1200 for a one-year insurance policy. 6. Reoeived a bill for $300 for advertising for the current month. Payment will be made in two weeks. 7. Billed customer $5,000 for servioes performed on account 8. Hireda a new employee who will begin work next week at a rate of $1,250 per week. 9. Collected $1,000 from customers billed in transaction 7 10. The Company paid dividends of $800 to stockholders. 11. Received $750 in advance for services to be performed next month. 12. Made a partial payment of $100 for supplies purchased in 4.

Explanation / Answer

Solution:

Journal Entries Number Account Titles Debit Credit 1 Cash Dr $100,000.00            To Common Stock $100,000.00 2 Equipment Dr $18,000.00            To Cash $3,000.00            To Accounts Payable $15,000.00 3 Rent Expense Dr $500.00            To Cash $500.00 4 Supplies Dr $500.00            To Accounts Payable $500.00 5 Prepaid Insurance Dr $1,200.00            To Cash $1,200.00 6 Advertising expense Dr $300.00            To Accounts Payable $300.00 7 Accounts receivables Dr $5,000.00            To Service Revenue $5,000.00 8 No Entry 9 Cash Dr $1,000.00            To Accounts receivables $1,000.00 10 Dividends Dr $800.00            To Cash $800.00 11 Cash Dr $750.00            To Unearned Service Revenue $750.00 12 Accounts payable Dr $100.00            To Cash $100.00

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