Question

Question:Denzel Brooks opened a web consulting business called Venture Consultants and completed the following transactions in March.

March 1 Brooks invested \(150,000 cash along with \)22,000 in office equipment in the company in exchange for common stock.

2 The company prepaid \(6,000 cash for six months’ rent for an office. (Hint:Debit Prepaid Rent for \)6,000.)

3 The company made credit purchases of office equipment for \(3,000 and office supplies for \)1,200. Payment is due within 10 days.

6 The company completed services for a client and immediately received \(4,000 cash.

9 The company completed a \)7,500 project for a client, who must pay within 30 days.

12 The company paid \(4,200 cash to settle the account payable created on March 3.

19 The company paid \)5,000 cash for the premium on a 12-month insurance policy. (Hint:Debit Prepaid Insurance for \(5,000.)

22 The company received \)3,500 cash as partial payment for the work completed on March 9.

25 The company completed work for another client for \(3,820 on credit.

29 The company paid \)5,100 cash in dividends.

30 The company purchased \(600 of additional office supplies on credit.

31 The company paid \)500 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 (403); and Utilities Expense (690). Post the journal entries from

part 1 to the ledger accounts and enter the balance after each posting.

Short answer

The total of cash ledger balance amounts to$136,700.

Step-by-step solution

General Ledger (part 1)

Cash Account No. 101
Date	PR	Debit	Credit	Balance
Mar 1	G1	$ 150,000		$ 150,000
2	G1		$ 6,000	144,000
6	G1	4,000		148,000
12	G1		4,200	143,800
19	G2		5,000	138,800
22	G2	3,500		142,300
29	G2		5,100	137,200
31	G2		500	136,700

Accounts Receivables Account No. 106
Date	PR	Debit	Credit	Balance
Mar 9	G1	$ 7,500		$ 7,500
22	G2		$ 3,500	4,000
25	G2	3,820		7,820

Office Supplies Account No. 124
Date	PR	Debit	Credit	Balance
Mar 3	G1	$ 1,200		$ 1,200
30	G1	600		1,800

Prepaid Insurance Account No. 128
Date	PR	Debit	Credit	Balance
Mar 19	G2	$ 5,000		$ 5,000

General Ledger (part 2)

Prepaid Rent Account No. 131
Date	PR	Debit	Credit	Balance
Mar 2	G1	$ 6,000		$ 6,000

Office Equipment Account No. 163
Date	PR	Debit	Credit	Balance
Mar 1	G1	$ 22,000		$ 22,000
3	G1	3,000		$ 25,000

Accounts Payable Account No. 201
Date	PR	Debit	Credit	Balance
Mar 3	G1		$ 4,200	$ 4,200
12	G1	$ 4,200
30	G2		600	600

Common Stock Account No. 307
Date	PR	Debit	Credit	Balance
Mar 1	G1		$ 172,000	$ 172,000

Dividends Account No. 319
Date	PR	Debit	Credit	Balance
Apr 29	G2	$ 5,100		$ 5,100

Service Revenue Account No. 403
Date	PR	Debit	Credit	Balance
Mar 6	G1		$ 4,000	$ 4,000
9	G1		7,500	7,500
25	G2		3,820	3,820

General Ledger (part 3)

Utility Expenses Account No. 690
Date	PR	Debit	Credit	Balance
Mar 31	G2	$ 500		$ 500