Desiree Clark is a licensed CPA. During the first month of operations of her bus

Question

Desiree Clark is a licensed CPA. During the first month of operations of her business, the following events and transactions occurred. May 1 Clark invested $20,000 cash in her business. Hired a secretary-receptionist at a salary of $2,000 per month. Purchased $2,500 of supplies on account from Read Supply Company. 7 Paid office rent of $900 cash for the month. Completed a tax assignment and billed client $3,200 for services provided. Received $3,500 advance on a management consulting engagement. Received cash of $1.200 for services completed for C. Desmond Co. Paid secretary-receptionist $2.000 salary' for the month. solid 60% of balance due Read Supply Company. Desiree uses the following chart of accounts: No. 101 Cush. No. 112 Accounts Receivable. No. 126 Supplies. No. 201 Accounts Payable. No. 209 Unearned Service Revenue. No. 301 Owner's Capital. No. 400 Service Revenue. No. 726 Salaries and Wages Expense, and No. 729 Rent Expanse. Instructions Journalize the transactions. Post to the ledger accounts. Prepare a trial balance on May 31.2012.

Explanation / Answer

Journal Entries: Chart of Accounts Date Account Title Debit   Credit Cash -101 1-May Cash          20,000 Particulars Debit Particulars   Credit To Capital          20,000 To Capital          20,000 By Rent             900 To Unearned Service Revenue            3,500 By Accounts Payable          2,000 2-May Salaries            2,000 To Service Revenue            1,200 By Accounts Payable          1,500    To Accounts Payable            2,000 By Balance C/F        20,300          24,700        24,700 3-May Suppies            2,500    To Accounts Payable            2,500 Accounts Receivable -112 Particulars Debit Particulars   Credit 7-May Rent               900 To Service Revenue            3,200 Balance C/F          3,200    To Cash               900            3,200          3,200 11-May Accounts Receivable            3,200 Supplies -126 To Service Revenue            3,200 Particulars Debit Particulars   Credit    To Accounts Payable            2,500 By Cash          1,500 12-May Cash            3,500 By Balance C/F          1,000 To Unearned Service Revenue            3,500            2,500          2,500 17-May Cash            1,200 Accounts Payable -201 To Service Revenue            1,200 Particulars Debit Particulars   Credit Cash            3,500 Salaries            2,000 31-May Accounts payable            2,000 Balance C/F            1,000 Suppies          2,500    To Cash            2,000            4,500          4,500 31-May Accounts payable            1,500 Unearned Revenue -209    To Cash            1,500 Particulars Debit Particulars   Credit To Balance C/F            3,500 By Cash          3,500 Trial Balance Debit Credit            3,500          3,500 Cash          20,300 Accounts Receivable            3,200 Owners Capital -301 Accounts Payable            1,000 Particulars Debit Particulars   Credit Supplies            2,500 Balance C/F          20,000 By Cash        20,000 Unearned Revenue            3,500          20,000        20,000 Owners Capital          20,000 Service Revenue            4,400 Service Revenue-400 Salries & Wages            2,000 Particulars Debit Particulars   Credit Rent               900 Accounts Receivable          3,200 Total          28,900          28,900 Balance C/F            4,400 Cash            1,200            4,400          4,400 Salaries & Wages-726 Particulars Debit Particulars   Credit    To Accounts Payable            2,000 By Balance C/F          2,000            2,000          2,000 Rent-729 Particulars Debit Particulars   Credit    To Cash               900 Balance C/F             900               900                 900

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