2.cengagenow.com CengageNOWv2 | Online teaching and learning resource from Cenga
ID: 2539533 • Letter: 2
Question
2.cengagenow.com CengageNOWv2 | Online teaching and learning resource from Cengage Learn... Show Me How Calculator Print Item al entries and trial balance Chart of Accounts Journal T Accounts Unadjusted Trial Balance structions n August 1, 2016, BilM Hudson established Heritage Realty, which completed the following transactions during the month: Aug. 1 Bill Hudson transferred cash from a personal bank oount to an account to be used for the business in exchange for common stock, $30,600. Paid rent on office and equipment for the month, S2,750. 2 3 Purchased supplies on account, $2,350 4 Paid creditor on account, $890 5 Earned sales commissions, receiving cash, $15,800. 6 Paid agtomobile expenses for month, $1,800, and miscellaneous expenses, $680. 7 Paid office salaries, $2,000. 8 Determined that the cost of supplies used was $1,150. 9 Paid dividends, $2.800.Explanation / Answer
1. General Journal
In the absence of Chart of accounts. Used the most appropriate accounts generally used for the below transactions
Date
General Journal
Debit
Credit
Aug 1
Cash
30,600
Common stock
30,600
(to record issuance of common stock)
Aug 2
Rent expense
2,750
Cash
2,750
(to record payment of rent on office and equipment)
Aug 3
Supplies
2,350
Accounts payable
2,350
(to record purchase of supplies on account)
Aug 4
Accounts payable
890
Cash
890
(to record payment made to creditors)
Aug 5
Cash
15,800
Sales commission
15,800
(to record sales commission earned)
Aug 6
Automobile expense
1,600
Miscellaneous expense
680
Cash
2,280
(to record payment for automobile expense and miscellaneous expense)
Aug 7
Salaries expense
2,000
Cash
2,000
(to record payment of office salary)
Aug 8
Supplies expense
1,150
Supplies
1,150
(to record use of supplies)
Aug 9
Dividends
2,800
Cash
2,800
(to record payment of dividends)
2. T-Accounts
Cash
Aug 1
30,600
Aug 2
2,750
Aug 5
15,800
Aug 4
890
Aug 6
2,280
Aug 7
2,000
Aug 8
2,800
Closing Balance
35,680
Common Stock
Aug 1
30,600
Rent Expense
Aug 2
2,750
Supplies
Aug 3
2,350
Aug 8
1,150
Closing Balance
1,200
Accounts Payable
Aug 4
890
Aug 3
2,350
Closing Balance
1,460
Sales commission
Aug 5
15,800
Automobile expense
Aug 6
1,600
Miscellaneous expense
Aug 6
680
Salaries expense
Aug 7
2,000
Supplies expense
Aug 8
1,150
Dividend
Aug 9
2,800
3. Unadjusted Trial Balance
Heritage Reality
Unadjusted Trial Balance
For the month of August, 2016
Accounts
Debit
Credit
Cash
35,680
Supplies
1,200
Common Stock
30,600
Accounts Payable
1,460
Sales commission
15,800
Rent expense
2,750
Automobile expense
1,600
Miscellaneous expense
680
Salaries expense
2,000
Supplies expense
1,150
Dividend
2,800
Total
47,860
47,860
4.
a) Amount of total revenue recorded in ledger:
Sales commission = $15,500
b) Amount of total expense recorded in ledger:
Account
Amount
Rent expense
2,750
Automobile expense
1,600
Miscellaneous expense
680
Salaries expense
2,000
Supplies expense
1,150
Total Expense
8,180
C) Net Income = Total Income – Total expense
= (15,500 – 8,180)
= $7,620
5) Determine the increase or decrease in retained earnings
Increase/(Decrease) in retained earnings = Net income(Loss) – Dividend
= (7,620 – 2,800)
= $4,820
Date
General Journal
Debit
Credit
Aug 1
Cash
30,600
Common stock
30,600
(to record issuance of common stock)
Aug 2
Rent expense
2,750
Cash
2,750
(to record payment of rent on office and equipment)
Aug 3
Supplies
2,350
Accounts payable
2,350
(to record purchase of supplies on account)
Aug 4
Accounts payable
890
Cash
890
(to record payment made to creditors)
Aug 5
Cash
15,800
Sales commission
15,800
(to record sales commission earned)
Aug 6
Automobile expense
1,600
Miscellaneous expense
680
Cash
2,280
(to record payment for automobile expense and miscellaneous expense)
Aug 7
Salaries expense
2,000
Cash
2,000
(to record payment of office salary)
Aug 8
Supplies expense
1,150
Supplies
1,150
(to record use of supplies)
Aug 9
Dividends
2,800
Cash
2,800
(to record payment of dividends)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.