Principles of Accounting1.docx

Principles of Accounting  Name: PHAM KHANH HUY Class: BBC 5.4

Chapter 2

P2-2A Emily Valley is a licensed dentist. During the first first month of the operation of her business, the following events and transaction occurred: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Invested $20,000 cash in her business Hired a secretary receptionist at a salary of $700 per week payable monthly. Paid office rent for the month $1,000 Purchased dental supplies on account from Dazzle Company $4,000 Received dental services and billed insurance companies $5,100 Received $1,000 cash advance from Leah Mataruka for an implant Received $2,100 cash for services performed from Michael Santos Paid secretary receptionist for the month $2,800 Paid $2,400 to Dazzle for accounts payable due

Answers: a)

General Journal J1

Date April .1

1 2

3

Account Tiles and Explanation

Ref. 101 301

Debit 20,000

Rent expenses Cash

729 101

1,100

Supplies Account payable

126 201

4,000

Cash Owner’s Capital (Owner’s investment of cash in business) No entry required

Credit 20,000

1,100

4,000

10

11

20

30

30

(Purchased supplies on account from Dazzle Company) Account Receivable Service revenue (Performed dental services and billed insurance company) Cash Unearned service revenue (Received cash advance from Leah Mataruka for an implant) Cash Service revenue (Received cash for services performed from Michael Santos) Salaries and Wages expense Cash Accounts payable Cash

112 400

5,100

101 209

1,000

101 400

2,100

726 101

2,800

101 201

2,400

5,100

1,000

2,100

2,800

2,400

 b)

General Ledger

Cash Date 2017 April. 1 2 11 20 30 30

Explanation

Ref.

Debit

J1 J1 J1 J1 J1 J1

20,000

Credit

1,100 1,000 2,100 2,400 2,800

Accounts Receivable Date 2017 April. 10

Explanation

Ref. J1

Debit 5,100

No. 101 Balance 20,000 18,900 19,900 22,000 19,600 16,800 No. 112

Credit

Balance 5,100

Supplies Date 2017 April. 3

Explanation

Ref. J1

No. 126 Debit

Credit

2,400

2,400

Accounts Payable Date 2017 April. 3 30

Explanation

Ref. J1 J1

No. 201 Debit

Credit

Balance

4,000

4,000 1,600

2,400

Unearned service revenue Date 2017 April. 11

Explanation

Ref. J1

Debit

No. 209 Credit

Balance

1,000

1,000 No. 301

Owner’s Capital

Date 2017 April. 1

Explanation

Ref. J1

Debit

Credit

Balance

20,000

20,000

Service Revenue Date 2017 April. 20 3

Explanation

Ref. J1

No. 400 Debit

J1

Credit

Balance

5,100 2,100

5,100 7,200

Salaries and Wages expense Date 2017 April. 30

Explanation

Ref. J1

Balance

Debit 2,800

No. 726 Credit

Balance 2,800

Rent expenses Date 2017 April. 30

Explanation

Ref. J1

No. 729 Debit

Credit

1,100

1,100

c)

Emily’s business

Trial balance April 30, 2017

Debit Cash Accounts Receivable Supplies Accounts payable Unearned service revenue Owner’s Capital Service revenue Salaries and Wages expense Rent expenses Total

Credit

$16,800 5,100 4,000 1,600 1,000 20,000 7,200 2,800 1,100 $29,800

Balance

$29,800

E2-14 The accounts in the ledger of Overnite Delivery Service contain the following balances on July 31, 2017: Prepare a trial balance with the accounts arranged as illustrated in the chapter and fill in the missing amount for cash. Answers:

Overnite Delivery Service Trial Balance July 31, 2017

Cash ($78,821 –  debit total without cash $66,340) Account Receivable Prepaid Insurance Equipment Account Payable Owner’s Capital  Owner’s Drawing  Salaries and Wages Payable  Notes Payable Service Revenue Salaries and Wages Expense Gasoline Expense Utilities Expense Maintenance and Repairs Expense Total

Debit $12,481

Credit

7,642 1,968 49,360 $8,396 42,000 700 815 17,000 10,610 4,428 758 523 961 $78,821

$78,821