On October 1, 2018, Jay Pryor established an interior decorating business, Pione
ID: 2436577 • Letter: O
Question
On October 1, 2018, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:
Enter the following transactions on Page 2 of the two-column journal:
Required:
1. Journalize and insert the posting references for each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. For a compound transaction, if an amount box does not require an entry, leave it blank.
2. Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in the general journal as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. If an amount box does not require an entry, leave it blank.
Feedback
1. Identify which accounts are affected in each transaction. Keep in mind that every transaction involves at least two accounts. Determine whether the account increases or decreases and record each increase or decrease following the rules of debit and credit. Use the Posting Reference column to enter the corresponding account number from the general ledger account. Remember total debits should equal total credits in your entries.
2. See the illustration in Exhibit 4 below. The 4-column accounts ledger is a more formal presentation of the T accounts. The Posting Reference column should have the page number from the journal where the transaction is found. The debits and credits for each journal entry are posted to the accounts in the order in which they occur in the journal. After each entry, subtotal the 4-column ledger, making sure to maintain the correct normal balance and double-checking any non-normal balances to see if they are valid or possible.
Learning Objective 1, Learning Objective 2, Learning Objective 3 and Learning Objective 4.
3. Prepare an unadjusted trial balance for Intrex Designs as of October 31, 2018. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses.For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example.
4. Determine the excess of revenues over expenses for October.
$
Explanation / Answer
Date Particulars Post ref. Dr. Cr.
Oct. 1: Cash 11 Dr. 32800
Common Stock 31 Cr. 32800
Oct.4 : Rent Expense 53 dr. 3180
Cash 11 cr. 3180
Oct. 10: Truck 18 dr. 30000
Cash 11 cr. 3000
Notes payable 21 cr. 27000
Oct. 13: Equipment 16 Dr. 12790
Account payable 22 cr. 12790
Oct. 14 : Supplies 13 dr. 2200
Cash 11 cr. 2200
Oct. 15 : Prepaid Insurace 14 dr. 4920
Cash 11 cr. 4920
Oct. 15 : Cash 11 dr. 13780
Fees Earned 41 cr. 13780
Oct. 21: Account payable 22 dr. 4560
Cash 11 cr. 4560
Oct. 24 Accounts receivable 12 Dr. 15680
Fees earned 41 Cr. 15680
Oct. 26 Truck Expense 55 Dr. 1440
Account payable 22 Cr.1440
Oct 27 Utilities Expense 54 Dr. 1640
Cash 11 Cr. 1640
Oct. 27 Misc. Expenses 59 Dr. 590
Cash 11 Cr. 590
Oct. 29 Cash 11 Dr. 6560
Account rececivable 12 Cr. 6560
Oct. 30 Wages 51 Dr. 4360
Cash 11 Cr. 4360
Oct. 31 Dividends 33 Dr. 3640
Cash 11 Cr. 3640
General Ledger Account Cash ACCOUNT NO. 11 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 1 Common Stock 12 32800 Oct. 4 Rent Expense 53 3180 Oct. 10 Truck 18 3000 Oct. 14 Supplies 13 2200 Oct. 15 Prepaid Insurance 14 4920 Oct. 15 Fee earned 41 13780 Oct. 21 Accounts Payable 22 4560 Oct. 27 Utilities Expense 54 1640 Oct. 27 Miscellaneous Expense 27 590 Oct. 29 Accounts Receivable 29 6560 0 Oct. 30 Wages Expense 30 4360 Oct. 31 Dividends 31 3640 25050 53140 28090 Account Accounts Receivable ACCOUNT NO. 12 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 24 Fees Earned 41 15680 Oct. 29 Cash 11 6560 9120 Account Supplies ACCOUNT NO. 13 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 14 Cash 13 2200 2200 Account Prepaid Insurance ACCOUNT NO. 14 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 15 Cash 11 4920 4920 Account Equipment ACCOUNT NO. 16 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Accounts Payable 22 12790 12790 Oct. 13 1 Account Truck ACCOUNT NO. 18 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 10 Cash 11 3000 Oct. 10 Notes Payable 21 27000 30000 Account Notes Payable ACCOUNT NO. 21 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 10 truck 18 27000 27000 Account Accounts Payable ACCOUNT NO. 22 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 13 Equipment 16 12790 Oct. 21 Cash 11 4560 Oct. 26 Truck Expense 55 1440 9670 Account Common Stock ACCOUNT NO. 31 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 1 Cash 11 32800 32800 Account Dividends ACCOUNT NO. 33 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 31 Cash 11 3640 3640 Account Fees Earned ACCOUNT NO. 41 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 15 Cash 11 13780 Oct. 24 Accounts Receivable 12 15680 29460 Account Wages Expense ACCOUNT NO. 51 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 30 Cash 11 4360 4360 Account Rent Expense ACCOUNT NO. 53 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 4 Cash 11 3180 3180 Account Utilities Expense ACCOUNT NO. 54 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 27 Cash 11 1640 1640 Account Truck Expense ACCOUNT NO. 55 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 26 Accounts Payable 22 1440 0 1440 0 Account Miscellaneous Expense ACCOUNT NO. 59 Balance Date Item Post. Ref. Debit Credit Debit Credit 2018 Oct. 27 Cash 11 590 590 5) Excess of revenue over expenditure is fee earned minus supplies, utilities, rent, wages, misc. exp, truck expenses = 16050 (dividend is not considered as its is not an expenditure but an appropriation of profits) Trial Balance Dr. Cr. Cash 25050 Truck 30000 Account receivable 9120 Prepaid Insurance 4920 Equipment 12790 Common stock 32800 Account payable 9670 Notes payable 27000 Truck Exp 1440 Misc. Exp 590 Utilities 1640 Supplies 2200 Dividend 3640 Rent 3180 Wages 4360 Fee earned 29460 98930 98930Related Questions
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