On January 1, 2014, Faith Schultz established Heavenly Realty, which completed t

Question

On January 1, 2014, Faith Schultz established Heavenly Realty, which completed the following transactions during the month a. Faith Schultz transferred cash from a personal bank account to an account to be used for the business in exchange for capital stock, $23,000. b. Paid rent on office and equipment for the month, $4,350. c. Purchased supplies on account, $1,290 d. Paid creditor on account, $470. e. Earned sales commissions, receiving cash, $19,780. f. Paid automobile expenses (including rental charge) for month, $1,210, and miscellaneous expenses, $810 g. Paid offige salaries, $2,530 h. Determined that the cost of supplies used was $710 i. Paid dividends, $1,170o. Required:

Explanation / Answer

Heavenly Reality JOURNAL January 31, 2014 Date Account Tiltles and Explanation Debit ($) Credit ($) a Cash a/c …….Dr           23,000                   To Schultz's capital a/c           23,000 (Being the capital contribution) b Rent a/c ……………………..Dr             4,350               To Cash a/c             4,350 (Rent paid for office & equipment) c Supplies a/c ……………………..Dr             1,290                  To accounts payables a/c             1,290 (purchase of supplies) d Accounts payable a/c ………..Dr                 470                 To cash a/c                 470 (payment to creditors) e Cash a/c …….Dr           19,780             To sales commission           19,780 (Being the sales revenue) f Automobile expenses a/c …….Dr             1,210 Misc. expenses a/c ………..Dr                 810                 To cash a/c             2,020 (Payment of expenses) g Office salaries a/c …………………Dr             2,530                 To cash a/c             2,530 (paid office salaries) h No entry required i Dividend a/c ……………………..Dr             1,170                 To cash a/c             1,170 (paid dividend) Heavenly Reality Unadjusted Trial Balance January 31, 2014 Particulars Debit ($) Credit ($) Cash           32,240 Schultz's capital           23,000 Rent             4,350 Supplies             1,290 Accounts payable                 820 sales commission 19780 Automobile expenses 1210 Misc. expenses 810 Office salaries 2530 Dividend 1170 Total           43,600           43,600 Total Revenue $19,780 Tota Expenses $11,360 Net Income $8,420

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