Question

Humble Management Services opened for business and completed these transactions in September.

Sep. 1 Henry Humble, the owner, invested \(38,000 cash along with office equipment valued at \)15,000 in the company in exchange for common stock.

2 The company prepaid \(9,000 cash for 12 months’ rent for office space. (Hint:Debit Prepaid Rent for \)9,000.)

4 The company made credit purchases for \(8,000 in office equipment and \)2,400 in office supplies. Payment is due within 10 days.

8 The company completed work for a client and immediately received \(3,280 cash.

12 The company completed a \)15,400 project for a client, who must pay within 30 days.

13 The company paid \(10,400 cash to settle the payable created on September 4.

19 The company paid \)1,900 cash for the premium on an 18-month insurance policy. (Hint:Debit Prepaid Insurance for \(1,900.)

22 The company received \)7,700 cash as partial payment for the work completed on September 12.

24 The company completed work for another client for \(2,100 on credit.

28 The company paid \)5,300 cash in dividends.

29 The company purchased \(550 of additional office supplies on credit.

30 The company paid \)860 cash for this month’s utility bill.

Required

2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (401); and Utilities Expense (690). Post journal entries from part 1 to the ledger accounts and enter the balance after each posting.

Short answer

The total cash ledger balance amounts to $21,520.

Step-by-step solution

General Ledger (part 1)

Cash Account No. 101
Date	PR	Debit	Credit	Balance
Sept 1	G1	$ 38,000		$ 38,000
2	G1		$ 9,000	29,000
8	G1	3,280		32,280
13	G1		10,400	21,880
19	G1		1,900	19,980
22	G2	7,700		27,680
28	G2		5,300	22,380
30	G2		860	21,520

Accounts Receivables Account No. 106
Date	PR	Debit	Credit	Balance
Sept 12	G1	$ 15,400		$ 15,400
22	G2		$ 7,700	7,700
24	G2	2,100		9,800

Office Supplies Account No. 124
Date	PR	Debit	Credit	Balance
Sept 4	G1	$ 2,400		$ 2,400
29	G2	550		2,950

Prepaid Insurance Account No. 128
Date	PR	Debit	Credit	Balance
Apr 19	G1	$ 1,900		$ 1,900

Prepaid Rent Account No. 131
Date	PR	Debit	Credit	Balance
Sept 19	G1	$ 9,000		$ 9,000

General Ledger (part 2)

Office Equipment Account No. 163
Date	PR	Debit	Credit	Balance
Sept 1	G1	$ 15,000		$ 15,000
4	G1	8,000		$ 23,000

Accounts Payable Account No. 201
Date	PR	Debit	Credit	Balance
Sept 4	G1		$ 10,400	$ 10,400
13	G1	$ 10,400
29	G2		550	550

Common Stock Account No. 307
Date	PR	Debit	Credit	Balance
Sept 1	G1		$ 53,000	$ 53,000

Dividends Account No. 319
Date	PR	Debit	Credit	Balance
Sept 28	G2	$ 5,300		$ 5,300

Service Revenue Account No. 403
Date	PR	Debit	Credit	Balance
Sept 8	G1		$ 3,280	$ 3,280
12	G1		15,400	18,680
24	G2		2,100	20,780

Utility Expenses Account No. 690
Date	PR	Debit	Credit	Balance
Sept 30	G2	$ 860		$ 860