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Journalize a series of transactions. 1 Stockholders invested $40,000 cash in the

ID: 2441838 • Letter: J

Question

Journalize a series of transactions.
1 Stockholders invested $40,000 cash in the business in exchange for common stock.
4 Purchased land costing $30,000 for cash.
8 Incurred advertising expense of $1,800 on account.
11 Paid salaries to employee $1,500.
12 Hired park manager at a salary of $4,000 per month, effective May 1.
13 Paid $1,500 cash for a one year insurance policy.
17 Declared and paid a $1,000 cash dividend.
20 Received $5,700 in cash for admission fees.
25 Sold 100 coupon books for $25 each. Each book contains 10 coupons that entitle the holder to
1 admission per park.
30 Received $8,900 in cash admission fees.
30 Paid $900 on balance owed for advertisiing incurred on April 8.

Mendez uses the following account: Cash;Prepaid Insurance;Land;Accounts payable;Unearned Admissions Revenue; Common Stock;Dividends; Admission Revenue; Advertising Expense; and Salaries Expense.


Journalize transactions, post, and prepare a trial balance.
II) Jane Kent is a Licensed CPA. During the first month of operations of her business, Jane Kent Inc, the following events and transactions occurred.
May 1 Stockholders invested $25,000 cash in exchange for common stock.
2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $2,500 of supplies on account from Read Supply Company.
7 Paid office rent of $900 cash for the month.
11 Completed a tax assignment and billed client $2,100 for services provided.
12 Received $3,500 advance on a management consulting engagement .
17 Received cash of $1,200 for services completed for H. Arnold Co.
31 Paid Secretary-receptionist $2,000 salary for the month.
31 Paid 40% of balance due Read Supply Company.
Jane uses the following chart accounts: No. 101 Cash, Mo. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 205 Unearned Revenue, No.311 Common Stock, No. 400 Service Revenue, no. 726 Salaries Expense, and No. 729, Rent Expense.
Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts
(c) Prepare a trial balance on May 31,2008.

Explanation / Answer

Date

Particulars

Amount (Dr.)

Amount (Cr.)

April. 1

Cash

$40,000

    Capital stock

$40,000

(Owners invest cash in the business)

4

Land

$30,000

    Cash

$30,000

(Purchased land)

8

Advertising Expenses

$1,800

     Cash

$1,800

(Paid advertisement expenses)

11

Salaries

$1,500

     Cash

$1,500

(Paid salaries)

13

Pre-paid Insurance

$1,500

     Cash

$1,500

(To record pre-paid insurance policy amount)

17

Dividends

$1,000

      Cash

$1,000

(Paid cash dividends)

20

Cash

$5,700

     Admission fees

$5,700

(To record receipt of admission fees)

25

Cash

$2,500

Unearned Admission Revenue

$2,500

(To record unearned admission revenue)

30

Cash

$8,900

Admission fees

$8,900

(To record receipt of admission fees)

30

Advertising Expenses

$900

Cash

$900

(To record advertisement t expenses)

Date

Particulars

Amount Dr.

Amount Cr.

1-May

Cash

$25,000

         Capital Stock

25,000

(Owners invest cash in the business)

3

Supplies

2,500

          Accounts payable

2,500

(Purchases from Read supply company)

7

Rent

900

           Cash

900

(Paid office rent)

11

Accounts Receivable

2,100

           Unearned revenue

2,100

(Billed clients for consulting services rendered)

12

Cash

3,500

              Unearned revenue

3,500

(Cash received)

17

Cash

1,200

              Consulting Revenue

1,200

(Cash received)

31

Salary

2,000

              Cash

2,000

(Paid salaries)

31

Accounts payable

1,000

              Cash

1,000

(Cash paid to supplies)

Cash Account

1-May

Capital Stock       

25,000

7-May

Rent                  

900

12-May

Unearned Revenue

3,500

31-May

Salary             

2000

17-May

Consulting revenue

1,200

31-May

Accounts payable

1000

Closing balance

25,800

1-Jun

Opening balance

25,800

Capital Stock

1-May

Cash

25,000

Salary Account

31-May

Cash

$2,000

Supplies Account

3-May

Accounts payable

2,500

Accounts payable

31-May

Cash

1,000

3-May

Supplies

2,500

Rent

7-May

Cash

900

Accounts receivables

5/`11

Unearned revenue

2,100

Unearned Revenue

11-May

Accounts receivables

2,100

12-May

Cash

3,500

Closing balance

5,600

Consulting Revenue

17-May

Cash

1,200

Trail Balance

Particulars

Debit

credit

Cash

25,800

Capital stock

25,000

Salaries

2,000

Supplies

2,500

Accounts payable

1,500

Rent

900

Accouonts receivables

2,100

Unearned Revenue

5,600

Consulting revenue

1,200

Total

33,300

33,300

Date

Particulars

Amount (Dr.)

Amount (Cr.)

April. 1

Cash

$40,000

    Capital stock

$40,000

(Owners invest cash in the business)

4

Land

$30,000

    Cash

$30,000

(Purchased land)

8

Advertising Expenses

$1,800

     Cash

$1,800

(Paid advertisement expenses)

11

Salaries

$1,500

     Cash

$1,500

(Paid salaries)

13

Pre-paid Insurance

$1,500

     Cash

$1,500

(To record pre-paid insurance policy amount)

17

Dividends

$1,000

      Cash

$1,000

(Paid cash dividends)

20

Cash

$5,700

     Admission fees

$5,700

(To record receipt of admission fees)

25

Cash

$2,500

Unearned Admission Revenue

$2,500

(To record unearned admission revenue)

30

Cash

$8,900

Admission fees

$8,900

(To record receipt of admission fees)

30

Advertising Expenses

$900

Cash

$900

(To record advertisement t expenses)