Jane Whitfield, a sole proprietor, established the JW Flower Shop on January 2,

Question

Jane Whitfield, a sole proprietor, established the JW Flower Shop on January 2, 2010. The following transactions have occurred during the month of January: Jan. 5. Jane deposited $ 15,000 in her business checking account. This is her initial investment in the business. Jan. 7. Jane purchased flower grooming equipment for $4,500. She paid $2,000 as a down payment and signed a note to pay the balance in two payments. Jan. 10. Jane purchased a computer system for $2,500, cash. Jan. 12. She sold flowers to a wedding ceremony in the amount of $4,500, but she had to bill them. The invoice was to be paid by February, 2010. Jan. 15. Jane purchased office supplies in the amount of $1,500. Jan. 20. She received ½ of what she billed for flowers for the wedding ceremony on Jan. 12th. Jan. 22. She withdrew $2,000. for her personal use. Jan. 25. She decided to pay one payment that she owed on her equipment purchase on Jan. 7th. Jan. 31. Jane hired an assistant and paid the wages by the end of the month in the amount of $1,500. Jan 31. She had a total of $25,000 in cash sales for the month. Adjusting entries – A1 - she used 2/3 of the supplies by the end of the month, A2 – depreciation on the grooming equipment - $450. REQUIRED A. Record the journal entries B. Set up necessary T-Accounts and post the journal entries C. Prepare a trial balance for the period ended January 31, 2010 D. Prepare an income statement for the period January 2010 E. Prepare a statement of changes in capital for the period January 2010.

Explanation / Answer

A) 5-Jan Cash Dr 15000      Capital Cr 15000 7-Jan Equipment Dr 4500            Cash Cr 2000            Notes Payable Cr 2500 10-Jan Computer Dr 2500            Cash Cr 2500 12-Jan Accounts receivable Dr 4500           Revenue Cr 4500 15-Jan office supplies Dr 1500            Cash Cr 1500 20-Jan Cash Dr 2250           Accounts receivable Cr 2250 22-Jan Drawings Dr 2000              Cash Cr 2000 25-Jan Notes Payable Dr 1250                Cash Cr 1250 31-Jan Wages Dr 1500                  Cash Cr 1500 31-Jan Cash Dr 25000               Revenue Cr 25000 31-Jan Supplies Expenses Dr 1000            Office supplies Cr 1000 31-Jan Depriciation - equipment Dr 450           Accumulated depriciation - equipment Cr 450 B) Cash 5-Jan To Capital 15000 7-Jan By equipment 2000 20-Jan To Accounts receivable 2250 10-Jan By computer 2500 31-Jan To revenue 25000 15-Jan By office supplies 1500 22-Jan By drawings 2000 25-Jan By Notes payable 1250 31-Jan By wages 1500 31-Jan By Balance c/d 31500 42250 42250 Capital 31-Jan To balance c/d 15000 5-Jan By Cash 15000 15000 15000 Equipment 7-Jan To Cash 2000 31-Jan By balance c/d 4500 To Notes payable 2500 4500 4500 Notes payable 25-Jan To Cash 1250 7-Jan By equipment 2500 31-Jan To balance c/d 1250 2500 2500 Computer 10-Jan To Cash 2500 31-Jan By balance c/d 2500 2500 2500 Accounts receivable 12-Jan To revenue 4500 20-Jan By cash 2250 By balance c/d 2250 4500 4500 Revenue 31-Jan To balance c/d 29500 12-Jan By accounts receivable 4500 31-Jan By Cash 25000 29500 29500 Office supplies 15-Jan To Cash 1500 31-Jan By supplies 1000 31-Jan By balance c/d 500 1500 1500 supplies expense 31-Jan To office supplies 1000 31-Jan By balance c/d 1000 1000 1000 Drawings 22-Jan To Cash 2000 31-Jan By balance c/d 2000 2000 2000 Wages 31-Jan To Cash 1500 31-Jan By balance c/d 1500 1500 1500 depriciation - equipment 31-Jan To accumulated depriciation - equipment 450 31-Jan By balance c/d 450 450 450 Accumulated depriciation - equipment 31-Jan To Balance /c d 450 31-Jan By deprciation 450 450 450 C) Trial Balance Dr Cr Cash 31500 Capital 15000 Equipment 4500 Notes Payable 1250 Computer 2500 Accounts receivable 2250 Revenue 29500 Office supplies 500 Supplies expense 1000 Drawings 2000 wages 1500 Depriciation - equipment 450 Accumulated depriciation - equipment 450 Total 46200 46200 0 D) Income Statement Revenue 29500 Less Supplies expense 1000 wages 1500 Depriciation - equipment 450 2950 Net Income 26550 E) Statement of changes in capital Capital 15000 Add ; Net Income transferred from Income statement 26550 Less : Drawings 2000 ending capital 39550

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.