On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed

Question

On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month: Jan. 1 Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $29,000. 2 Paid rent on office and equipment for the month, $2,250. 3 Purchased supplies on account, $2,300. 4 Paid creditor on account, $825. 5 Earned fees, receiving cash, $15,660. 6 Paid automobile expenses (including rental charge) for month, $1,620, and miscellaneous expenses, $830. 7 Paid office salaries, $2,200. 8 Determined that the cost of supplies used was $1,350. 9 Withdrew cash for personal use, $2,800. Required: 1. Journalize entries for transactions Jan. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles. 2. Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of January 31, 2019. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for January. 5. Determine the increase or decrease in owner’s equity for January.

Explanation / Answer

1-

General Journal

2-

Ledger Accounts

Date

cash

1-Jan

cash

29000

capital

29000

rent expense

2250

capital

29000

fees revenue

15660

accounts payable

825

automobile expense

1620

2-Jan

rent expense

2250

office salaries

2200

cash

2550

Misscellaneous expense

830

drawings

1350

3-

Supplies

2300

Balance

35585

accounts payables

2300

total

44660

44660

Capital

4-

accounts payable

825

cash

29000

cash

825

5-

cash

15660

rent expense

fees revenue

15660

cash

2250

6-

automobile expense

1620

Misscellaneous expense

830

supplies

cash

2450

accounts payable

2300

cost of supplies

1350

balance

950

7-

office salaries

2200

total

2300

2300

cash

2200

accounts payables

cash

825

supplies

2300

8-

cost of supplies

1350

balance

1475

supplies

1350

fee revenue

9-

drawings

1350

cash

15660

cash

1350

3-Unadjusted Trial Balance

Automobile expense

Explanation

Debit

credit

cash

1620

cash

35585

capital

29000

misscelaneous expense

rent expense

2250

cash

830

supplies

950

accounts payables

1475

cost of supplies

fee revenue

15660

supplies

1350

Automobile expense

1620

misscelaneous expense

830

Drawings

cost of supplies

1350

cash

1350

Drawings

1350

salaries expense

2200

total

46135

46135

4-

Amount of total revenue recorded

15660

Amount of total expense recorded

8250

rent expense

2250

Automobile expense

1620

misscelaneous expense

830

cost of supplies

1350

salaries expense

2200

Amount of net income

15660-8250

7410

Owners equity

Capital

29000

add net income

7410

less drawings

1350

new level of owners equity

35060

Increase in owners equity

35060-29000

6060

1-

General Journal

2-

Ledger Accounts

Date

cash

1-Jan

cash

29000

capital

29000

rent expense

2250

capital

29000

fees revenue

15660

accounts payable

825

automobile expense

1620

2-Jan

rent expense

2250

office salaries

2200

cash

2550

Misscellaneous expense

830

drawings

1350

3-

Supplies

2300

Balance

35585

accounts payables

2300

total

44660

44660

Capital

4-

accounts payable

825

cash

29000

cash

825

5-

cash

15660

rent expense

fees revenue

15660

cash

2250

6-

automobile expense

1620

Misscellaneous expense

830

supplies

cash

2450

accounts payable

2300

cost of supplies

1350

balance

950

7-

office salaries

2200

total

2300

2300

cash

2200

accounts payables

cash

825

supplies

2300

8-

cost of supplies

1350

balance

1475

supplies

1350

fee revenue

9-

drawings

1350

cash

15660

cash

1350

3-Unadjusted Trial Balance

Automobile expense

Explanation

Debit

credit

cash

1620

cash

35585

capital

29000

misscelaneous expense

rent expense

2250

cash

830

supplies

950

accounts payables

1475

cost of supplies

fee revenue

15660

supplies

1350

Automobile expense

1620

misscelaneous expense

830

Drawings

cost of supplies

1350

cash

1350

Drawings

1350

salaries expense

2200

total

46135

46135

4-

Amount of total revenue recorded

15660

Amount of total expense recorded

8250

rent expense

2250

Automobile expense

1620

misscelaneous expense

830

cost of supplies

1350

salaries expense

2200

Amount of net income

15660-8250

7410

Owners equity

Capital

29000

add net income

7410

less drawings

1350

new level of owners equity

35060

Increase in owners equity

35060-29000

6060

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