ACCT 001A Lecture Notes - Lecture 4: Trial Balance, Accounts Payable, Retained Earnings

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pucemallard867

25 Jun 2020

School

Pasadena City College

Department

Accounting

Course

ACCT 001A

Professor

Hossain

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Document Summary

Enter the ledger reference into the general journal. The trial balance lists all account balances in the general ledger. Six steps for searching for and correcting errors. Verify that the trial balance columns are correctly added. Verify that account balances are correctly entered from the ledger. See whether a debit (or credit) balance is mistakenly listed as a credit (or debit) Recompute each account balance in the ledger. Verify that each journal entry is properly posted. Verify that each original journal entry has equal debits and credits. Statement of retained earnings include dividends from trial balance and net income. Balance sheet includes assets and liabilities and equities and retained earnings. Debt ratio which describes the relationship between the amounts of the company"s liabilities and assets. Office equipment is on a balance sheet. Cash dividends on statement of retained earnings. The accounting period most are annually, semiannually, and quarterly.

Related Questions

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

AquaFresh Water Testing Service was established on April 16. AquaFresh uses field equipment and field supplies (chemicals and other supplies) to analyze water for unsafe contaminants in streams, lakes, and ponds. Transactions related to purchases and cash payments during the remainder of April are as follows:

April 16.		Issued Check No. 1 in payment of rent for the remainder of April, $3,500.
April 16.		Purchased field supplies on account from Hydro Supply Co., $5,340.
April 16.		Purchased field equipment on account from Pure Equipment Co., $21,450.
April 17.		Purchased office supplies on account from Best Office Supply Co., $510.
April 19.		Issued Check No. 2 in payment of field supplies, $3,340, and office supplies, $400.
		Post the journals to the accounts payable subsidiary ledger.
April 23.		Purchased office supplies on account from Best Office Supply Co., $660.
April 23.		Issued Check No. 3 to purchase land, $140,000.
April 24.		Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340.
April 26.		Issued Check No. 5 to Pure Equipment Co. in payment of April 16 invoice, $21,450.
		Post the journals to the accounts payable subsidiary ledger.
April 30.		Acquired land in exchange for field equipment having a cost of $12,000.
April 30.		Purchased field supplies on account from Hydro Supply Co., $7,650.
April 30.		Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510.
April 30.		Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700.
April 30.		Issued Check No. 7 in payment of salaries, $29,400.
		Post the journals to the accounts payable subsidiary ledger.

Required:

1. Journalize the transactions (in chronological order as presented in the data) for April. Use a purchases journal and a cash payments journal, and a two-column general journal. Use debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:

11	Cash	19	Land
14	Field Supplies	21	Accounts Payable
15	Office Supplies	61	Salary Expense
17	Field Equipment	71	Rent Expense

At the points indicated in the narrative of transactions, post to the following accounts in chronological order in the accounts payable subsidiary ledger:

Best Office Supply Co.

Hydro Supply Co.

Pure Equipment Co.

For those boxes in which no entry is required, leave the box blank. If no other account is needed in the "Other Accounts Dr." column select "No Entry Required".

PURCHASES JOURNAL								PAGE 1
Date	Account Credited	Post. Ref.	Accounts Payable Cr.	Field Supplies Dr.	Office Supplies Dr.	Other Accounts Dr.	Post. Ref.	Amount
April 16	Hydro Supply Co.	?				No Entry Required
April 16	Pure Equipment Co.	?				Field Equipment
April 17	Best Office Supply Co.	?				No Entry Required
April 23	Best Office Supply Co.	?				No Entry Required
April 30	Hydro Supply Co.	?				No Entry Required
April 30	Pure Equipment Co.	?				Field Equipment
April 30

CASH PAYMENTS JOURNAL						PAGE 1
Date	Ck. No.	Account Debited	Post. Ref.	Other Accounts Dr.	Accounts Payable Dr.	Cash Cr.
April 16		Rent Expense
April 19		Field Supplies
		Office Supplies
April 23		Land
April 24		Hydro Supply Co.	?
April 26		Pure Equipment Co.	?
April 30		Best Office Supply Co.	?
April 30		Salary Expense
April 30		Total

JOURNAL				PAGE 1
Date	Description	Post. Ref.	Debit	Credit
April 30	Land
	Field Equipment

2. Post the individual entries in chronological order (Other Accounts columns of the purchases journal and the cash payments journal and both columns of the general journal) to the appropriate general ledger accounts. Post to the subsidiary ledger in chronological order. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, post transactions from the purchases journal first, then the cash payments journal before posting from the general journal.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger.

For those boxes in which no entry is required, leave the box blank.

ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Date	Item	Post. Ref.	Debit	Credit	Balance
Account: Best Office Supply Co.
April 17
April 23
April 30
Account: Hydro Supply Co.
April 16
April 24
April 30
Account: Pure Equipment Co.
April 16
April 26
April 30

Post transactions in chronological order. However, if there is more that one transaction on the same date, post from the purchases journal first, then from the cash payments journal before posting from the general journal. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

GENERAL LEDGER
					Balance
Date	Item	Post. Ref.	Debit	Credit	Dr.	Cr.
Account: Cash #11
April 30
Account: Field Supplies #14
April 19
April 30
Account: Office Supplies #15
April 19
April 30
Account: Field Equipment #17
April 16
April 30
April 30
Account: Land #19
April 23
April 30
Account: Accounts Payable #21
April 30
April 30
Account: Salary Expense #61
April 30
Account: Rent Expense #71
April 16

4. Prepare a schedule of the accounts payable creditor balances.

AQUAFRESH WATER TESTING SERVICE Accounts Payable Creditor Balances April 30
Best Office Supply Co.	$
Hydro Supply Co.
Pure Equipment Co.
Total accounts payable	$

5. All are reasons why AquaFresh might consider using a subsidiary ledger for the field equipment EXCEPT:

To secure lower pricing on equipment purchases

lemonwasp608

Hello,

i am in accounting and having trouble with my general ledger. i need help with the set up and exactly how to do the balances. its not clicking with me at all. below i have included the information on the problem im working on, and would be great if i could some help.

Journal Entries and Trial Balance

On June 1, 2016, Kim Wheeler established an interior decorating business, Intrex Designs. During the month, Kim completed the following transactions related to the business.

June	1	Kim transferred cash from a personal bank account to an account to be used for the business, $18,400.
	4	Paid rent for period of June 4 to end of month, $1,780.
	6	Purchased a truck for $15,000, paying $1,000 cash and giving a note payable for the remainder.
	8	Purchased equipment on account, $7,180.
	10	Purchased supplies for cash, $1,230.
	12	Paid annual premiums on property and casualty insurance, $2,760.
	15	Received cash for job completed, $7,730.
	23	Paid creditor a portion of the amount owed for equipment purchased on June 13, $2,560.
	24	Recorded jobs completed on account and sent invoices to customers, $8,800.
	25	Received an invoice for truck expenses, to be paid in July, $810.
	26	Paid utilities expense, $920.
	27	Paid miscellaneous expenses, $330.
	28	Received cash from customers on account, $3,680.
	29	Paid wages of employees, $2,450.
	30	Withdrew cash for personal use, $2,040.

Required:

1. Journalize each transaction in a two-column journal, beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. For a compound transaction, if an amount box does not require an entry, leave it blank.

11 Cash	31 Kim Wheeler, Capital
12 Accounts Receivable	32 Kim Wheeler, Drawing
13 Supplies	41 Fees Earned
14 Prepaid Insurance	51 Wages Expense
16 Equipment	53 Rent Expense
18 Truck	54 Utilities Expense
21 Notes Payable	55 Truck Expense
22 Accounts Payable	59 Miscellaneous Expense

General Journal				Page 1
Date	Description	Post. Ref.	Debit	Credit
2016
June 1	Cash
	Kim Wheeler, Capital
June 4	Rent Expense
	Cash
June 6	Truck
	Cash
	Notes Payable
June 8	Equipment
	Accounts Payable
June 10	Supplies
	Cash
June 12	Prepaid Insurance
	Cash
June 15	Cash
	Fees Earned

General Journal				Page 2
Date	Description	Post. Ref.	Debit	Credit
2016
June 23	Equipment
	Accounts Payable
June 24	Accounts Receivable
	Fees Earned
June 25	Truck Expense
	Accounts Payable
June 26	Utilities Expense
	Cash
June 27	Miscellaneous Expense
	Cash
June 28	Cash
	Accounts Receivable
June 29	Wages Expense
	Cash
June 30	Kim Wheeler, Drawing
	Cash

2. Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in the general journal as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. If an amount box does not require an entry, leave it blank.

General Ledger
Account	Cash				ACCOUNT NO.	11
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 1
June 4
June 6
June 10
June 12
June 15
June 23
June 26
June 27
June 28
June 29
June 30

Account	Accounts Receivable				ACCOUNT NO.	12
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 24
June 28

Account	Supplies				ACCOUNT NO.	13
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 10

Account	Prepaid Insurance				ACCOUNT NO.	14
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 12

Account	Equipment				ACCOUNT NO.	16
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 8

Account	Truck				ACCOUNT NO.	18
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 6

Account	Notes Payable				ACCOUNT NO.	21
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 6

Account	Accounts Payable				ACCOUNT NO.	22
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 8
June 23
June 25

Account	Kim Wheeler, Capital				ACCOUNT NO.	31
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 1

Account	Kim Wheeler, Drawing				ACCOUNT NO.	32
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 30

Account	Fees Earned				ACCOUNT NO.	41
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 15
June 24

Account	Wages Expense				ACCOUNT NO.	51
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 29

Account	Rent Expense				ACCOUNT NO.	53
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 4

Account	Utilities Expense				ACCOUNT NO.	54
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 26

Account	Truck Expense				ACCOUNT NO.	55
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 25

Account	Miscellaneous Expense				ACCOUNT NO.	59
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 27

3. Prepare an unadjusted trial balance for Intrex Designs as of June 30, 2016. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example.

Intrex Designs Unadjusted Trial Balance June 30, 2016
	Debit Balances	Credit Balances
Cash
Accounts Receivable














Totals

4. Determine the excess of revenues over expenses for June.
$

greydonkey905

Record (journalize) transactions in the books) Doherty Tree Cellular, Inc.,
completed the following transactions during April 2012, its first month of operations:

Apr 1	Received $19,800 and issued common stock.
2	Purchased $200 of office supplies on account.
4	Paid $14,300 cash for land to use as a building site.
6	Performed service for customers and received cash of $2,600.
9	Paid $100 on accounts payable.
17	Performed service for UFax on account totaling $1,900.
23	Collected $100 from UFax on account.
30	Paid the following expenses: salary, $1,900; rent, $1,300.

1.Record the transactions in the journal of Doherty Tree Cellular, Inc. Key transactions by date and include an explanation for each entry.

CLASS, LETS TAKE RECORDING STEP 1 STEP FURTHER - THE TRIAL BALANCE

Now that we know what the accounting equation is and we have some experience with Journal Entries.

Letâs review the process and take the recording process one step further.

STEP 1) Analyze transaction: As an actual accountant, we determine if a transaction should be recorded by analyzing source documents.

For example: If the Company makes a sale; they will complete a sales document (or sales
tape is generated). If the Company purchases something a purchase invoice is forwarded to Accounting. There is a different type of source documents for different types of transactions.

Note: as an accountant a large part of the battle is making sure there is a source document for all transactions and that all departments capture and forward these documents to Accounting!

STEP 2) Accounting prepares journal entry: for each transaction based on GAAP. (Mostly using the constraints, assumptions, principles we've discussed: materiality, conservatism, matching, revenue recognition, etc).

The entry is entered into a Journal for those types of Transactions (There is a Sales Journal, A/P Journal for purchases, Payroll journal for payroll related entries, General Journal for misc. entries., etc.

Journal entries are made in the proper form, and include: date, description, indent of credit side of each entry.

STEP 3) The Journal entry is posted to General ledger; which includes all activity for all accounts.

However, the recording process is not over. Letâs talk about the trial balance. Please answer ALL however only post ONE question at a time to allow more to participate.

1) Why do we prepare it?

apricotox859

ACCT 001A Lecture Notes - Lecture 4: Trial Balance, Accounts Payable, Retained Earnings

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