Chapter 2: 12RQ (page 56)
What are the four parts of a journal entry?
Four part of journal entry are date, debit account name and amount, credit name and account and explanation.
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Question:Courtney Meehan has trouble keeping her debits and credits equal. During a recent month, Courtney made the following accounting errors:
a. In preparing the trial balance, Courtney omitted a \(5,000 Notes Payable. The debit to Cash was correct.
b. Courtney posted a \)1,000 Utilities Expense as \(100. The credit to Cash was correct.
c. In recording a \)600 payment on account, Courtney debited Furniture instead of Accounts Payable.
d. In journalizing a receipt of cash for service revenue, Courtney debited Cash for \(50 instead of the correct amount of \)500. The credit was correct.
e. Courtney recorded a \(210 purchase of office supplies on account by debiting Office Supplies for \)120 and crediting Accounts Payable for \(120.
Requirements 2. Identify each account that has an incorrect balance and the amount and direction of the error (e.g., “Accounts Receivable \)500 too high”).
Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance
Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions:
Nov. 1 Received \(41,000 cash and issued common stock to Stewart.
4 Purchased office supplies, \)1,200, and furniture, \(2,300, on account.
6 Performed services for a law firm and received \)2,100 cash.
7 Paid \(27,000 cash to acquire land to be used in operations.
10 Performed services for a hotel and received its promise to pay the \)800 within one week.
14 Paid for the furniture purchased on November 4 on account.
15 Paid assistant’s semimonthly salary, \(1,470.
17 Received cash on account, \)500.
20 Prepared a design for a school on account, \(680.
25 Received \)1,900 cash for design services to be performed in December.
28 Received \(3,100 cash for consulting with Plummer & Gordon.
29 Paid \)840 cash for a 12-month insurance policy starting on December 1.
30 Paid assistant’s semimonthly salary, \(1,470. 30 Paid monthly rent expense, \)650.
30 Received a bill for utilities, \(650. The bill will be paid next month.
30 Paid cash dividends of \)2,800.b
Requirements 3. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal
If total debits equal total credits on the trial balance, is the trial balance error-free? Explain your answer.
Question: The following transactions occurred for Wilke Technology Solutions:
May 1 The business received cash of \(105,000 and issued common stock to Zoe Wilke.
2 Purchased office supplies on account, \)550.
4 Paid \(57,000 cash for building and land. The building had a fair market value of \)45,000.
6 Performed services for customers and received cash, \(3,600.
9 Paid \)350 on accounts payable.
17 Performed services for customers on account, \(3,500.
19 Paid rent expense for the month, \)1,200.
20 Received \(1,500 from customers for services to be performed next month.
21 Paid \)900 for advertising in next month’s IT Technology magazine.
23 Received \(3,100 cash on account from a customer.
31 Incurred and paid salaries, \)1,700.
Analyzing and journalizing transactions
Journalize the transactions of Wilke Technology Solutions. Include an explanation with each journal entry. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Advertising; Land; Building; Accounts Payable; Unearned Revenue; Common Stock; Service Revenue; Rent Expense; and Salaries Expense
Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance Victor Yang practices medicine under the business title Victor Yang, M.D. During March, the medical practice completed the following transactions:
Mar. 1 Yang contributed \(62,000 cash to the business in exchange for common stock.
5 Paid monthly rent on medical equipment, \)570.
9 Paid \(14,000 cash to purchase land to be used in operations.
10 Purchased office supplies on account, \)1,500.
19 Borrowed \(27,000 from the bank for business use.
22 Paid \)1,400 on account.
28 The business received a bill for advertising in the daily newspaper to be paid in April, \(220.
31 Revenues earned during the month included \)6,700 cash and \(5,800 on account.
31 Paid employees’ salaries \)2,100, office rent \(1,500, and utilities \)350. Record as a compound entry.
31 The business received \(1,000 for medical screening services to be performed next month.
31 Paid cash dividends of \)7,100.
The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense.
Requirements 2. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal.
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