Chapter 3: Problem Set A

Problem 2-1A: Preparing and Posting Journal Entries; Preparing a Trial Balance 1. General Journal Entries for Linkworks (April): 1. April 1: Karla Tanner invested cash and office equipment in exchange for common stock. markdown Cash ................................... 80,000 Office Equipment ................ 26,000 Common Stock .......................... 106,000 2. April 2: Prepaid $9,000 for 12 months' rent. markdown Prepaid Rent ........................ 9,000 Cash ........................................ 9,000 3. April 3: Made credit purchases of office equipment and supplies. markdown Office Equipment ................ 8,000 Office Supplies .................... 3,600 Accounts Payable ................... 11,600 4. April 6: Completed services for a client and received $4,000 cash. markdown Cash ................................... 4,000 Services Revenue ..................... 4,000 5. April 9: Completed a $6,000 project on credit. markdown Accounts Receivable .......... 6,000 Services Revenue ..................... 6,000 6. April 13: Paid off account payable of $11,600. markdown Accounts Payable ................... 11,600 Cash ........................................ 11,600 7. April 19: Paid $2,400 for 12 months’ prepaid insurance. markdown Prepaid Insurance ................. 2,400 Cash ........................................ 2,400 8. April 22: Received $4,400 partial payment for work completed on April 9. markdown Cash ................................... 4,400 Accounts Receivable .......... 4,400 9. April 25: Completed additional services for $2,890 on credit. markdown Accounts Receivable .......... 2,890 Services Revenue ..................... 2,890 10. April 28: Paid $5,500 cash dividend. markdown Dividends ............................... 5,500 Cash ....................................... 5,500 11. April 29: Purchased additional office supplies on credit for $600. markdown Office Supplies .................... 600 Accounts Payable ................... 600 12. April 30: Paid $435 for utilities. markdown Utilities Expense .................. 435 Cash ....................................... 435 2. Posting to Ledger Accounts: Account Cash (101) Debit Credit Balance 80,000 80,000 9,000 71,000 11,600 59,400 4,000 63,400 2,400 61,000 4,400 65,400 5,500 59,900 435 59,465 6,000 Accounts Receivable (106) 6,000 4,400 1,600 2,890 4,490 3,600 3,600 Office Supplies (124) 600 4,200 Prepaid Insurance (128) 2,400 2,400 9,000 Prepaid Rent (131) 9,000 8,000 Office Equipment (163) 8,000 8,000 11,600 11,600 Accounts Payable (201) 11,600 600 600 106,000 106,000 Common Stock (307) 5,500 Dividends (319) 5,500 4,000 4,000 Services Revenue (403) 6,000 10,000 2,890 12,890 435 Utilities Expense (690) 435 3. Trial Balance as of April 30: Account Debit Credit Cash 59,465 Accounts Receivable 4,490 Office Supplies 4,200 Prepaid Insurance 2,400 Prepaid Rent 9,000 Office Equipment 8,000 Accounts Payable 600 Common Stock 106,000 Dividends 5,500 Services Revenue 12,890 Account Utilities Expense Total Debit Credit 435 93,490 119,490 Problem 2-2A: General Journal Entries for Aracel Engineering 1. General Journal Entries for Aracel Engineering (June): 1. June 1: Owner invested cash, office equipment, and drafting equipment. markdown Cash ................................... 100,000 Office Equipment ................ 5,000 Drafting Equipment .............. 60,000 Common Stock ........................ 165,000 2. June 2: Purchased land with a note payable. markdown Land .................................. 49,000 Cash ........................................ 6,300 Notes Payable ........................ 42,700 3. June 3: Purchased a portable building. markdown Building ................................ 55,000 Cash ....................................... 55,000 4. June 6: Paid for insurance policy. markdown Prepaid Insurance ................ 3,000 Cash ........................................ 3,000 5. June 9: Provided services and received cash. markdown Cash ................................... 6,200 Services Revenue ..................... 6,200 6. June 12: Purchased drafting equipment with partial cash and note payable. markdown Drafting Equipment .............. 20,000 Cash ........................................ 9,500 Notes Payable ........................ 10,500 7. June 19: Completed services on credit. markdown Accounts Receivable .......... 14,000 Services Revenue ..................... 14,000 8. June 22: Purchased office equipment on credit. markdown Office Equipment ................ 1,150 Accounts Payable ................... 1,150 9. June 25: Completed services on credit. markdown Accounts Receivable .......... 22,000 Services Revenue ..................... 22,000 10. June 29: Purchased TV advertising on credit. markdown Advertising Expense .......... 1,333 Accounts Payable .................. 1,333 2. Posting to Ledger Accounts (Continue posting all journal entries to ledger accounts using the format in Problem 2-1A) 3. Trial Balance for June: Account Debit Credit Cash 22,945 Accounts Receivable 29,000 Account Prepaid Insurance Office Equipment Drafting Equipment Land Building Accounts Payable Notes Payable Common Stock Dividends Services Revenue Wages Expense Advertising Expense Repairs Expense Total Debit Credit 3,000 6,150 80,000 49,000 55,000 1,333 53,200 165,000 9,480 42,200 1,200 3,833 925 261,733 **261