ACC 101 Lecture 2: Chapter 2 - Measurement Concepts_ Recording Business Transactions
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Assignment Choice #1: TrialBalance
Listed below are the transactions for Hunter Marketing, Inc. forthe month of July:
July 1 | Hunter begins his marketing company and invests $50,000cash. | |
July 5 | Purchases computers and office equipment on account fromOfficeMax for $10,250. | |
July 6 | Pays rent for office space $800 for the month. | |
July 6 | Employs a secretary, Mary Jones. | |
July 8 | Purchases office supplies for cash at $960. | |
July 9 | Receives $2,430 from customer for services performed. | |
July 11 | Pays miscellaneous office expenses $375. | |
July 13 | Bills customers $4,900 for services performed. | |
July 15 | Pays Office Max $3,500 on account. | |
July 18 | Withdraws $2,000 from business for personal use. | |
July 20 | Hunter appeared on the cover of a local newsmagazine. Relatedarticle extolled Hunterâs expertise as well as the new companyâsvalues and customer service that it brings to companies in thecommunity. This exposure led to increased inquiries fromprospective clients, and Hunter hopes this will increase futuresales. | |
July 20 | Receives $1,900 from customers on account. | |
July 23 | Bills customers $6,320 for services performed. | |
July 30 | Pays the following expenses in cash: office salaries $2,300 andutilities $400. |
Use the transactions to complete the following tasks:
Enter the transactions shown above in appropriate general ledgeraccounts (use T-accounts). Use the following ledger accounts: Cash,Accounts Receivable, Supplies on Hand, Office Equipment,Accumulated Depreciation, Accounts Payable, Hunter-Capital, ServiceRevenue, Rent Expense, Miscellaneous Office Expense, OfficeSalaries Expense, Supplies Expense, Utilities Expense, DepreciationExpense and Income Summary.
Prepare an unadjusted trial balance.
Record depreciation using a five-year life on the officeequipment, the straight-line method, and no salvage value. Round towhole numbers. Also, record an adjustment for office supplies usedin the amount of $510.
Prepare an adjusted trial balance.
Prepare an income statement, a statement of retained earnings,and an unclassified balance sheet.
Close the ledger.
Prepare a post-closing trial balance.
Which transaction do you think had the most significant economicimpact on the Company? Why are economically relevant events notrecorded in the financial records?
Transactions related to revenue and cash receipts completed byAspen Architects Co. during the period June 2â30, 2016, are asfollows:
June 2. | Issued Invoice No. 793 to Nickle Co., $7,330. | |
June 5. | Received cash from Mendez Co. for the balance owed on itsaccount. | |
June 6. | Issued Invoice No. 794 to Preston Co., $2,640. | |
June 13. | Issued Invoice No. 795 to Shilo Co., $3,930. | |
Post revenue and collections to the accounts receivablesubsidiary ledger. | ||
June 15. | Received cash from Preston Co. for the balance owed on June1. | |
June 16. | Issued Invoice No. 796 to Preston Co., $8,210. | |
June 19. | Received cash from Nickle Co. for the balance due on invoice ofJune 2. | |
June 20. | Received cash from Preston Co. for invoice of June 6. | |
June 22. | Issued Invoice No. 797 to Mendez Co., $10,820. | |
June 25. | Received $2,990 note receivable in partial settlement of thebalance due on | |
June 30. | Recorded cash fees earned, $18,460. |
Required:
1. Insert the following balances in the generalledger as of June 1:
11 | Cash | $16,240 |
12 | Accounts Receivable | 19,780 |
14 | Notes Receivable | 8,610 |
41 | Fees Earned | - |
After completing the recording of the transactions in thejournals in part 3, total each of the columns of the specialjournals, and post the individual entries and totals to the generalledger. Insert account balances after the last posting. Whenposting to the general ledger, post in chronological order.However, if there is more than one entry on the same date, be sureto post transactions from the revenue journal before postingtransactions from the cash receipts journal.
If an amount box does not require an entry, leave it blank.
GENERAL LEDGER | ||||||
Date | Item | Post. | Debit | Credit | Balance Dr. | Balance Cr. |
Account: Cash # 11 | ||||||
2016 | ||||||
June 1 | Balance | â | ||||
Account: Accounts Receivable # 12 | ||||||
2016 | ||||||
June 1 | Balance | â | ||||
Account: Notes Receivable # 14 | ||||||
2016 | ||||||
June 1 | Balance | â | ||||
Account: Fees Earned # 41 | ||||||
2016 | ||||||
2. Insert the following balances in theaccounts receivable subsidiary ledger as of June 1:
Mendez Co. | $11,370 |
Nickle Co. | - |
Preston Co. | 8,410 |
Shilo Co. | - |
After completing the recording of the transactions in thejournals in part 3, post to the accounts receivable subsidiaryledger in chronological order, and insert the balances at thepoints indicated in the narrative of transactions. Determine thebalance in the customer's account before recording a cash receipt.If an amount box does not require an entry, leave it blank.
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER | |||||
Date | Item | Post. Ref. | Debit | Credit | Balance |
Account: Mendez Co. | |||||
2016 | |||||
June 1 | Balance | â | |||
Account: Nickle Co. | |||||
2016 | |||||
Account: Preston Co. | |||||
2016 | |||||
June 1 | Balance | â | |||
Account: Shilo Co. | |||||
2016 | |||||
3. Prepare a single-column revenue journal (p.40) and a cash receipts journal (p. 36). Use the following columnheadings for the cash receipts journal: Fees Earned Cr., AccountsReceivable Cr., and Cash Dr. The Fees Earned column is used torecord cash fees.
4. Using the two special journals and thetwo-column general journal (p. 1), journalize the transactions inchronological order for June. Post to the accounts receivablesubsidiary ledger (in part 2), and insert the balances at thepoints indicated in the narrative of transactions. Determine thebalance in the customer's account before recording a cashreceipt.
5. Total each of the columns of the specialjournals, and post the individual entries and totals to the generalledger (in part 1). Insert account balances after the lastposting.
If an amount box does not require an entry, leave it blank.
REVENUE JOURNAL | PAGE 40 | |||
Date | Invoice No. | Account Debited | Post. Ref. | Accounts Rec. Dr. |
2016 | ||||
â | ||||
â | ||||
â | ||||
â | ||||
â | ||||
CASH RECEIPTS JOURNAL | PAGE 36 | ||||
Date | Account Credited | Post. Ref. | Fees Earned Cr. | Accts. Rec. Cr. | Cash Dr. |
2016 | |||||
â | |||||
â | |||||
â | |||||
â | |||||
â | |||||
JOURNAL | PAGE 1 | |||
Date | Description | Post Ref. | Debit | Credit |
2016 | ||||
6. What is the sum of the customerbalances?
$
Does the sum of the customer balances agree with the accountsreceivable controlling account in the general ledger?
7. Would an automated system omit postings to acontrolling account as performed in step 5 for AccountsReceivable?