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PR 2-1B

Entries into T Accounts and Trial Balance

OBJ. 1, 2, 3, 4

Ken Jones, an architect, opened an office on April 1, 20Y4. During the month, he completed the following transactions connected with his professional practice:

Transferred cash from a personal bank account to an account to be used for the business, $18,000.
Purchased used automobile for $19,500, paying $2,500 cash and giving a note payable for the remainder.
Paid April rent for office and workroom, $3,150. https://homeworkcrew.com/
Paid cash for supplies, $1,450.
Purchased office and computer equipment on account, $6,500.
Paid cash for annual insurance policies on automobile and equipment, $2,400.
Received cash from a client for plans delivered, $12,000.
Paid cash to creditors on account, $1,800.
Paid cash for miscellaneous expenses, $375.
Received invoice for blueprint service, due in May, $2,500.
Recorded fees earned on plans delivered, payment to be received in May, $15,650.
Paid salary of assistant, $2,800.
Paid cash for miscellaneous expenses, $200.
Paid $300 on note payable.
Paid gas, oil, and repairs on automobile for April, $550.

Instructions

Record these transactions directly in the following T accounts without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Accounts Payable; Notes Payable; Ken Jones, Capital; Professional Fees; Rent Expense; Salary Expense; Blueprint Expense; Automobile Expense; Miscellaneous Expense. To the left of each amount entered in the accounts, place the appropriate letter to identify the transaction.
Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
Prepare an unadjusted trial balance for Ken Jones, Architect, as of April 30, 20Y4.

Answer

Check Figure: Total of Debit column: $69,550
Determine the net income or net loss for April.

PR 2-2B

Journal Entries and Trial Balance

OBJ. 1, 2, 3, 4

On August 1, 20Y5, Rafael Masey established Planet Realty, which completed the following transactions during the month:

Rafael Masey transferred cash from a personal bank account to an account to be used for the business, $17,500.
Purchased supplies on account, $2,300.
Earned fees, receiving cash, $13,300.
Paid rent on office and equipment for the month, $3,000.
Paid creditor on account, $1,150.
Withdrew cash for personal use, $1,800.
Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400.
Paid office salaries, $2,800.
Determined that the cost of supplies used was $1,050.

Instructions

Journalize entries for transactions (a) through (i), using the following account titles: Cash; Supplies; Accounts Payable; Rafael Masey, Capital; Rafael Masey, Drawing; Fees Earned; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. Journal entry explanations may be omitted.
Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter 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.
Prepare an unadjusted trial balance as of August 31, 20Y5.
Determine the following:
1. Amount of total revenue recorded in the ledger.
2. Amount of total expenses recorded in the ledger.
3. Amount of net income for August.
Answer

Check Figure: c. $4,550
Determine the increase or decrease in owner’s equity for August.

PR 2-3B

Journal Entries and Trial Balance

OBJ. 1, 2, 3, 4

On October 1, 20Y6, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:

Oct.	1.	Jay transferred cash from a personal bank account to an account to be used for the business, $18,000.
	4.	Paid rent for period of October 4 to end of month, $3,000.
	10.	Purchased a used truck for $23,750, paying $3,750 cash and giving a note payable for the remainder.
	13.	Purchased equipment on account, $10,500.
	14.	Purchased supplies for cash, $2,100.
	15.	Paid annual premiums on property and casualty insurance, $3,600.
	15.	Received cash for job completed, $8,950.

Enter the following transactions on Page 2 of the two-column journal:

Oct.	21.	Paid creditor a portion of the amount owed for equipment purchased on October 13, $2,000.
	24.	Recorded jobs completed on account and sent invoices to customers, $14,150.
	26.	Received an invoice for truck expenses, to be paid in November, $700.
	27.	Paid utilities expense, $2,240.
	27.	Paid miscellaneous expenses, $1,100.
	29.	Received cash from customers on account, $7,600.
	30.	Paid wages of employees, $4,800.
	31.	Withdrew cash for personal use, $3,500.

Instructions

Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted.

11 Cash	31 Jay Pryor, Capital
12 Accounts Receivable	32 Jay Pryor, Drawing
13 Supplies	41 Fees Earned
14 Prepaid Insurance	51 Wages Expense
16 Equipment	53 Rent Expense
18 Truck	54 Utilities Expense
21 Notes Payable	55 Truck Expense
22 Accounts Payable	59 Miscellaneous Expense

Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. https://homeworkcrew.com/
Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 20Y6.

Answer

Check Figure: Total of Credit column: $70,300
Determine the excess of revenues over expenses for October.
Can you think of any reason why the amount determined in (4) might not be the net income for October?

PR 2-4B

Journal Entries and Trial Balance

OBJ. 1, 2, 3, 4

Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 20Y7, follows:

An unadjusted trial balance for Valley Realty, for July 31, 2 0 Y 7, is shown. The three-line heading for the statement is centered and consists of: Valley Realty; Unadjusted Trial Balance; July 31, 2 0 Y 7. The trial balance shows the following Accounts, Account No., Debit Balances, and Credit Balances: Cash, 11, debit balance of 52,500; Accounts Receivable, 12, debit balance of 100,100; Prepaid Insurance, 13, debit balance of 12,600; Office Supplies, 14, debit balance of 2,800; Land, 16, no debit balance as indicated by a dash; Accounts Payable, 21, credit balance of 21,000; Unearned Rent, 22, no credit balance as indicated by a dash; Notes Payable, 23, no credit balance as indicated by a dash; Cindy Getman, Capital, 31, credit balance of 87,500; Cindy Getman, Drawing, 32, debit balance of 44,800; Fees Earned, 41, credit balance of 591,500; Salary and Commission Expense, 51, debit balance of 385,000; Rent Expense, 52, debit balance of 49,000; Advertising Expense, 53, debit balance of 32,200; Automobile Expense, 54, debit balance of 15,750; and Miscellaneous Expense, 59, debit balance of 5,250. A single rule appears below 5,250 in the Debit Balances column and on the same row in the Credit Balances column. The total of the Debit Balances column is 700,000. The total of the Credit Balances column is also 700,000. Double rules appear below each of these numbers.

The following business transactions were completed by Valley Realty during August 20Y7:

Aug.	1.	Purchased office supplies on account, $3,150.
	2.	Paid rent on office for month, $7,200.
	3.	Received cash from clients on account, $83,900.
	5.	Paid insurance premiums, $12,000.
	9.	Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, $400.
Aug.	17.	Paid advertising expense, $8,000.
	23.	Paid creditors on account, $13,750.

Enter the following transactions on Page 19 of the two-column journal:

	29.	Paid miscellaneous expenses, $1,700.
	30.	Paid automobile expense (including rental charges for an automobile), $2,500.
	31.	Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, $2,000.
	31.	Paid salaries and commissions for the month, $53,000.
	31.	Recorded revenue earned and billed to clients during the month, $183,500.
	31.	Purchased land for a future building site for $75,000, paying $7,500 in cash and giving a note payable for the remainder.
	31.	Withdrew cash for personal use, $1,000.
	31.	Rented land purchased on August 31 to a local university for use as a parking lot during football season (September, October, and November); received advance payment of $5,000.

Instructions

Record the August 1 balance of each account in the appropriate balance column of a four-column account, write Balance in the item column, and place a check mark (✓) in the Posting Reference column.
Journalize the transactions for August in a two-column journal beginning on Page 18. Journal entry explanations may be omitted.
Post to the ledger, extending the account balance to the appropriate balance column after each posting.
Prepare an unadjusted trial balance of the ledger as of August 31, 20Y7.

Answer

Check Figure: Total of Debit column: $945,000
Assume that the August 31 transaction for Cindy Getman’s cash withdrawal should have been $10,000. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry. (c) Is this error a transposition or slide?

PR 2-5B

Corrected Trial Balance

OBJ. 4

Tech Support Services has the following unadjusted trial balance as of January 31, 20Y8:

An unadjusted trial balance for Tech Support Services, dated January 31, 2 0 Y 8, is shown. The three-line heading for the statement is centered and consists of: Tech Support Services; Unadjusted Trial Balance; January 31, 2 0 Y 8. The trial balance shows the following Accounts, Debit Balances, and Credit Balances: Cash, debit balance of 25,550; Accounts Receivable, debit balance of 44,050; Supplies, debit balance of 6,660; Prepaid Insurance, debit balance of 3,600; Equipment, debit balance of 162,000; Notes Payable, credit balance of 75,000; Accounts Payable, credit balance of 13,200; Thad Engelberg, Capital, credit balance of 101,850; Thad Engelberg, Drawing, debit balance of 33,000; Fees Earned, credit balance of 534,000; Wages Expense, debit balance of 306,000; Rent Expense, debit balance of 62,550; Advertising Expense, debit balance of 23,850; and Gas, Electricity, and Water Expense, debit balance of 17,000. A single rule appears below 17,000 in the Debit Balances column and on the same row in the Credit Balances column. The total of the Debit Balances column is 684,260. The total of the Credit Balances column is 724,050. Double rules appear below each of these numbers.

The debit and credit totals are not equal as a result of the following errors:

1. The cash entered on the trial balance was overstated by $8,000.
2. A cash receipt of $4,100 was posted as a debit to Cash of $1,400.

A debit of $12,350 to Accounts Receivable was not posted.
A return of $235 of defective supplies was erroneously posted as a $325 credit to Supplies.
An insurance policy acquired at a cost of $3,000 was posted as a credit to Prepaid Insurance.
The balance of Notes Payable was overstated by $21,000.
A credit of $3,450 in Accounts Payable was overlooked when the balance of the account was determined.
A debit of $6,000 for a withdrawal by the owner was posted as a debit to Thad Engelberg, Capital.
The balance of $28,350 in Advertising Expense was entered as $23,850 in the trial balance.
Miscellaneous Expense, with a balance of $4,600, was omitted from the trial balance.

Instructions

Prepare a corrected unadjusted trial balance as of January 31, 20Y8.

Answer

Check Figure: Total of Debit column: $712,500
Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.

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