Journal all transactions:
8/1 YOUfiled a charter with the State of Louisiana to form the YOURAccounting Corporation. The charter authorizes you to issue 5000shares of $2 par common stock. The state charged you a $75 fee tofile the charter. Since your business is not yet approved, you hadto pay this fee using personal funds.
9/1 Youreceived your charter from the State of Louisiana and officiallyopened your business. Your first order of business wasto become a shareholder of YOUR Accounting Corp. To do this, youpurchased 500 shares of common stock by issuing a check to YOURAccounting Corp for $10,000. You used this money to open a checkingaccount at First Funds Bank.
9/1 Yourented an office for YOUR Accounting Corp. The monthly rent is$500, with the first monthâs rent due immediately. You issue check#100 to Office Builders for the first monthâs rent.
9/2 Youthen went to the Apple store and purchased a new computer systemfor your business. Your Mac Pro cost $2700 and your new printercost $450. You set up a 30-day account with Apple to make thispurchase.
9/3 Youordered business cards and stationary from Marketing Media onaccount. The order totaled $250 and will be shipped FOBDestination. (Record all purchases of supplies in the Supplies onHand account).
9/4 Youdecided to purchase a new vehicle for your business. Upon visitingPro-Auto, you decide on a new SUV at a cost of $55,000. Thisvehicle will be used 100% for business purposes. You finance thevehicle with Pig E Bank at a rate of 5% for 6 years. Your firstmonthly payment is due on October 4.
NOTE: You will need to create a loanamortization schedule to determine the amount of the monthly noteand the interest expense for each month. You can use a website suchas www.bankrate.com to create the schedule. When recording yourjournal entries, round all amounts to the nearest dollar.
9/5 Youwent to the KEM Supply to purchase supplies for your business at acost of $600. KEM opened a customer charge account for you. Thepayment terms on your account will be 2/10, net 30. The time periodfor determining the payment amount begins on the purchase date.
9/6 Youpurchased a one-year auto insurance policy from InsureMart for$1200. InsureMart will send you a bill for the policy. YOURAccounting Corporation capitalizes all insurance policies on thedate of purchase and records the necessary expense at year-end asan adjusting entry.
9/10 Your first client,Red Fische, came in today needing assistance with filing theappropriate paperwork to start his new seafood restaurant. Youissued invoice #1 to Red Fische and he paid you an initial $2,000Engagement Fee. Red Fische also agreed to contract with you toprovide accounting services for $2,500 per month.
9/12 You issue check #101to YOUR Accounting Corp to establish a $500 Petty Cash Fund. Youwill use this account to make small cash purchases.
9/12 You reimburseyourself for the filing fees associated with forming yourcorporation.
9/14 You paid KEM Supply by issuingcheck #102
9/15 You hire anadministrative assistant, Mandi Handi, she will be paid a monthlysalary of $1500. You have decided that all pay periods will end onthe last day of the month and that checks will be issued on the5th of each month. Assume the following rates whenpreparing the payroll: federal income tax 15%, state income tax 5%,and FICA 7.65%.
YOUR Accounting Corp. has state andfederal unemployment insurance rates of 1% (FUTA) and 2% (SUTA) onthe first $7,700 of wages per employee. The employer FICA rate is7.65%.
9/16 Marketing Mediadelivered your business cards and stationary. Check #103 was issuedto pay for the supplies.
9/20 You visited a newclient, Anita Cooke, to set up a Quickbooks accounting system forher new business, Cooking For You. You gave Anita and invoice #2for the Engagement Fee and she paid you by issuing a check in theamount of $2,000. Anita also agreed to a monthly fee of $1,500 foryou to handle her ongoing accounting needs.
9/22 You purchased $50 offuel for your new SUV from Get ân Go. You charged this to your Getân Go account.
9/30 Mandi sent pro-ratedinvoices, #3 & #4 , to Red Fische and Cooking For You forMonthly Accounting Services. The payment terms are 1/10, net30.
9/30 You accrued intereston the Pig E. Bank note. Accrue interest based on the number ofdays in the month.
9/30 You computed andaccrued the payroll for September.
9/30 You received monthlybills for the following:
Max Power Company - $100, terms n/30
WaterWorks #1 - $20, terms n/30.
10/1 You paid the monthlyoffice rent of $500 by issuing check # 104.
10/2 You received and paidthe bill from the Apple Store by issuing check #105.
10/4 You make the firstmonthly payment to Pig E Banks by issuing check #106.
10/5 Igotta Troubles cameto your office looking for assistance with cleaning up heraccounting problems. You agree to assist her and agree upon anEngagement Fee of $2,000 plus an hourly charge of $250 for HourlyAccounting Services to be billed on the 15th and30th of each month with payment due in 15 days. Igottawrites you a check for the engagement fee in the amount of $2,000in payment of invoice #5.
10/5 You issued check #107to Mandi Handi for the September payroll.
10/7 You received a checkfrom Red Fische in full payment of invoice #3.
10/9 You decide that itis time to purchase a business cell phone. You visit the Applestore and purchase an Iphone 7 for a total purchase price of $849.You pay for the phone by issuing check #108.
10/12 You issued check #109 to MaxPower and check #110 to WaterWorks #1 in payment of Septemberutility bills.
10/14 You sent invoice to #6 to IgottaTroubles for 25 hours of Hourly Accounting Services, terms 1/10,n30.
10/16 You paid the fuel bill from Getân Go for the fuel purchased on 9/22 by issuing check #111.
10/18 Ima Payne comes to you needingassistance with depositing the monthly payroll taxes for herbusiness. You perform this service and hand her invoice #7 in theamount of $500 for Tax Services. Ima pays you in cash.
10/20 You received a check fromCooking For You in full payment of Invoice #4.
10/25 You Accounting Corp. declaredand paid dividends of $4 per share to its shareholders of record.The dividends are paid by issuing check #112.
10/30 You sent the following invoices,terms 1/10, net 30:
#8 to Igotta Troubles for 10 hours ofHourly Accounting Services
#9 to Red Fische for Monthly Accounting Services, and
#10 to Cooking For You for Monthly Accounting Services.
10/30 You accrued interest on the PigE. Bank note. Accrue interest based on the number of days in themonth.
10/30 You computed and accrued thepayroll for October.
10/30 You received monthly bills forthe following:
Max Power Company - $200, termsn/30
WaterWorks #1 - $20, terms n/30
Great Coverage Cellular - $50, terms n/3
11/1 You purchase a6-month liability insurance policy for YOUR Accounting Corp. byissuing check #113 in the amount of $300. YOUR AccountingCorporation capitalizes all insurance policies on the date ofpurchase and records the necessary expense at year-end as anadjusting entry.
11/1 You paid the monthlyoffice rent of $500 by issuing check # 114.
11/2 You make the secondmonthly payment to Pig E Banks by issuing check #115.
11/04 You purchase breakfast for theoffice from Cooking For You. You pay for breakfast by taking $20out of the petty cash fund.
11/05 You issue check #116 to MandiHandi for the October payroll.
11/06 You receive a $4,000 check fromIgotta Troubles.
11/07 You received full payment ofinvoice #10 from Cooking For You.
11/08 You issued check #117 to MaxPower and check #118 to WaterWorks #1and check #119 to GreatCellular Coverage in payment of October utility bills and Telephonebill.
11/10 You contracted Signs R Us todesign and fabricate a sign to place on your office to helpadvertise your business. Signs R Us gave you a bill totaling $600,payment is due upon delivery and installation of the sign.
11/12 You received full payment ofinvoice #9 from Red Fische.
11/15 You sent invoice #11 to IgottaTrouble for 15 hours of Hourly Accounting Services.
11/18 Ima Payne walks into your officeneeding assistance with Quickbooks Online. You pull up her businessand fix her problems. You issue invoice #12 to Ima for 4 hours ofHourly Accounting Services. Ima pays you $1,000 in cash.
11/25 You remitted payment to the U.STreasury for the federal income taxes, FICA taxes and FUTA taxesrelated to the September payroll (check #120). In addition, youremitted payment to the Louisiana Department of Revenue (check#121) for the state income taxes and SUTA taxes related to theSeptember payroll.
11/30 You sent the following invoices,terms 1/10, net 30:
#13 toIgotta Troubles for 12 hours of Hourly Accounting Services
#14 to Red Fische for Monthly Accounting Services, and
#15 to Cooking For You for Monthly Accounting Services.
11/30 You accrued interest on the PigE. Bank note. Accrue interest based on the number of days in themonth.
11/30 You computed and accrued thepayroll for November.
11/30 You received monthly bills forthe following:
Max Power Company - $150, terms n/30
WaterWorks #1 - $20, terms n/30
Great Coverage Cellular - $50, terms n/30.
12/1 You paid the monthlyoffice rent of $500 by issuing check # 122.
12/2 You make the thirdmonthly payment to Pig E Banks by issuing check #123.
12/04 You purchase $100 of postagestamps and make payment from the petty cash account.
12/05 You issue check #124 to MandiHandi for the November payroll.
12/09 You received the followingchecks in the mail:
Check #1212 from Igotta Troubles in the amount of $4,000
Check #809 from Red Fische in the amount of $2,475
Check #2569 from Cooking For You in the amount of $1485.
12/12 You remitted payment to the U.STreasury for the federal income taxes, FICA taxes and FUTA taxesrelated to the October payroll (check #125). In addition, youremitted payment to the Louisiana Department of Revenue (check#126) for the state income taxes and SUTA taxes related to theOctober payroll.
12/15 You send invoice #16 to IgottaTroubles for 10 hours of Hourly Accounting Services.
12/20 Ima Payne is back and needsassistance filing Federal Tax Form 990 for her business. Youperform this service and hand her invoice #17 in the amount of $500for Tax Services. Ima pays you in cash.
12/22 You receive a check in theamount of $5,000 from Igotta Troubles.
12/24 You purchased gift cards fromEatin Moore Grocers, to give as Christmas gifts to your clients.Eatin Moore charged your account in the amount of $1000 and gaveyou the bill.
12/30 You sent the following invoices,terms 1/10, net 30:
#18 toIgotta Troubles for 10 hours of Hourly Accounting Services
#19 to Red Fische for Monthly Accounting Services, and
#20 to Cooking For You for Monthly Accounting Services.
12/30 You accrued interest on the PigE. Bank note. Accrue interest based on the number of days in themonth.
12/30 You computed and accrued thepayroll for December. In addition to paying the regular monthlysalary to Mandi Handi, you also authorize a Christmas bonus of $500for Mandi and $10,000 for yourself.
12/30 You received monthly bills forthe following:
Max Power Company - $170, terms n/30
WaterWorks #1 - $20, terms n/30
Great Coverage Cellular - $50, terms n/30
Chart of Accounts:
Cash
105
Petty Cash
107
Accounts Receivable
110
Supplies on Hand
130
Prepaid Insurance
140
Computer Equipment
220
Accumulated Depreciation â ComputerEquipment
221
Cell Phone
230
Accumulated Depreciation â CellPhone
231
Vehicles
240
Accumulated Depreciation - Vehicles
241
Accounts Payable
310
Customer Deposits (Unearned Revenue)
320
SUTA Payable
330
FICA Payable
332
FUTA Payable
334
Federal Income Tax Payable
336
State Income Tax Payable
338
Current Maturities of Long-Term Debt
375
Notes Payable (long-term)
410
Interest Payable
420
Salaries Payable
425
Common Stock ($2 par value)
520
Additional Paid-in Capital on Common Stock
521
Retained Earnings
550
Dividends
560
Engagement fees
605
Monthly Accounting Services Revenue
610
Hourly Accounting Services Revenue
620
Tax Services Revenues
612
Sales Discounts
614
Advertising & Promotion Expense
725
Depreciation Expense
727
Rent Expense
730
Insurance Expense
735
Supplies Expense
740
Meals & Entertainment
745
Taxes and Licenses
767
Telephone Expense
770
Utilities Expense
775
Fuel Expense
780
Interest Expense
820
Payroll Tax Expense
825
Salaries Expense
830
Income Summay
900
Journal all transactions:
8/1 YOUfiled a charter with the State of Louisiana to form the YOURAccounting Corporation. The charter authorizes you to issue 5000shares of $2 par common stock. The state charged you a $75 fee tofile the charter. Since your business is not yet approved, you hadto pay this fee using personal funds.
9/1 Youreceived your charter from the State of Louisiana and officiallyopened your business. Your first order of business wasto become a shareholder of YOUR Accounting Corp. To do this, youpurchased 500 shares of common stock by issuing a check to YOURAccounting Corp for $10,000. You used this money to open a checkingaccount at First Funds Bank.
9/1 Yourented an office for YOUR Accounting Corp. The monthly rent is$500, with the first monthâs rent due immediately. You issue check#100 to Office Builders for the first monthâs rent.
9/2 Youthen went to the Apple store and purchased a new computer systemfor your business. Your Mac Pro cost $2700 and your new printercost $450. You set up a 30-day account with Apple to make thispurchase.
9/3 Youordered business cards and stationary from Marketing Media onaccount. The order totaled $250 and will be shipped FOBDestination. (Record all purchases of supplies in the Supplies onHand account).
9/4 Youdecided to purchase a new vehicle for your business. Upon visitingPro-Auto, you decide on a new SUV at a cost of $55,000. Thisvehicle will be used 100% for business purposes. You finance thevehicle with Pig E Bank at a rate of 5% for 6 years. Your firstmonthly payment is due on October 4.
NOTE: You will need to create a loanamortization schedule to determine the amount of the monthly noteand the interest expense for each month. You can use a website suchas www.bankrate.com to create the schedule. When recording yourjournal entries, round all amounts to the nearest dollar.
9/5 Youwent to the KEM Supply to purchase supplies for your business at acost of $600. KEM opened a customer charge account for you. Thepayment terms on your account will be 2/10, net 30. The time periodfor determining the payment amount begins on the purchase date.
9/6 Youpurchased a one-year auto insurance policy from InsureMart for$1200. InsureMart will send you a bill for the policy. YOURAccounting Corporation capitalizes all insurance policies on thedate of purchase and records the necessary expense at year-end asan adjusting entry.
9/10 Your first client,Red Fische, came in today needing assistance with filing theappropriate paperwork to start his new seafood restaurant. Youissued invoice #1 to Red Fische and he paid you an initial $2,000Engagement Fee. Red Fische also agreed to contract with you toprovide accounting services for $2,500 per month.
9/12 You issue check #101to YOUR Accounting Corp to establish a $500 Petty Cash Fund. Youwill use this account to make small cash purchases.
9/12 You reimburseyourself for the filing fees associated with forming yourcorporation.
9/14 You paid KEM Supply by issuingcheck #102
9/15 You hire anadministrative assistant, Mandi Handi, she will be paid a monthlysalary of $1500. You have decided that all pay periods will end onthe last day of the month and that checks will be issued on the5th of each month. Assume the following rates whenpreparing the payroll: federal income tax 15%, state income tax 5%,and FICA 7.65%.
YOUR Accounting Corp. has state andfederal unemployment insurance rates of 1% (FUTA) and 2% (SUTA) onthe first $7,700 of wages per employee. The employer FICA rate is7.65%.
9/16 Marketing Mediadelivered your business cards and stationary. Check #103 was issuedto pay for the supplies.
9/20 You visited a newclient, Anita Cooke, to set up a Quickbooks accounting system forher new business, Cooking For You. You gave Anita and invoice #2for the Engagement Fee and she paid you by issuing a check in theamount of $2,000. Anita also agreed to a monthly fee of $1,500 foryou to handle her ongoing accounting needs.
9/22 You purchased $50 offuel for your new SUV from Get ân Go. You charged this to your Getân Go account.
9/30 Mandi sent pro-ratedinvoices, #3 & #4 , to Red Fische and Cooking For You forMonthly Accounting Services. The payment terms are 1/10, net30.
9/30 You accrued intereston the Pig E. Bank note. Accrue interest based on the number ofdays in the month.
9/30 You computed andaccrued the payroll for September.
9/30 You received monthlybills for the following:
Max Power Company - $100, terms n/30
WaterWorks #1 - $20, terms n/30.
10/1 You paid the monthlyoffice rent of $500 by issuing check # 104.
10/2 You received and paidthe bill from the Apple Store by issuing check #105.
10/4 You make the firstmonthly payment to Pig E Banks by issuing check #106.
10/5 Igotta Troubles cameto your office looking for assistance with cleaning up heraccounting problems. You agree to assist her and agree upon anEngagement Fee of $2,000 plus an hourly charge of $250 for HourlyAccounting Services to be billed on the 15th and30th of each month with payment due in 15 days. Igottawrites you a check for the engagement fee in the amount of $2,000in payment of invoice #5.
10/5 You issued check #107to Mandi Handi for the September payroll.
10/7 You received a checkfrom Red Fische in full payment of invoice #3.
10/9 You decide that itis time to purchase a business cell phone. You visit the Applestore and purchase an Iphone 7 for a total purchase price of $849.You pay for the phone by issuing check #108.
10/12 You issued check #109 to MaxPower and check #110 to WaterWorks #1 in payment of Septemberutility bills.
10/14 You sent invoice to #6 to IgottaTroubles for 25 hours of Hourly Accounting Services, terms 1/10,n30.
10/16 You paid the fuel bill from Getân Go for the fuel purchased on 9/22 by issuing check #111.
10/18 Ima Payne comes to you needingassistance with depositing the monthly payroll taxes for herbusiness. You perform this service and hand her invoice #7 in theamount of $500 for Tax Services. Ima pays you in cash.
10/20 You received a check fromCooking For You in full payment of Invoice #4.
10/25 You Accounting Corp. declaredand paid dividends of $4 per share to its shareholders of record.The dividends are paid by issuing check #112.
10/30 You sent the following invoices,terms 1/10, net 30:
#8 to Igotta Troubles for 10 hours ofHourly Accounting Services
#9 to Red Fische for Monthly Accounting Services, and
#10 to Cooking For You for Monthly Accounting Services.
10/30 You accrued interest on the PigE. Bank note. Accrue interest based on the number of days in themonth.
10/30 You computed and accrued thepayroll for October.
10/30 You received monthly bills forthe following:
Max Power Company - $200, termsn/30
WaterWorks #1 - $20, terms n/30
Great Coverage Cellular - $50, terms n/3
11/1 You purchase a6-month liability insurance policy for YOUR Accounting Corp. byissuing check #113 in the amount of $300. YOUR AccountingCorporation capitalizes all insurance policies on the date ofpurchase and records the necessary expense at year-end as anadjusting entry.
11/1 You paid the monthlyoffice rent of $500 by issuing check # 114.
11/2 You make the secondmonthly payment to Pig E Banks by issuing check #115.
11/04 You purchase breakfast for theoffice from Cooking For You. You pay for breakfast by taking $20out of the petty cash fund.
11/05 You issue check #116 to MandiHandi for the October payroll.
11/06 You receive a $4,000 check fromIgotta Troubles.
11/07 You received full payment ofinvoice #10 from Cooking For You.
11/08 You issued check #117 to MaxPower and check #118 to WaterWorks #1and check #119 to GreatCellular Coverage in payment of October utility bills and Telephonebill.
11/10 You contracted Signs R Us todesign and fabricate a sign to place on your office to helpadvertise your business. Signs R Us gave you a bill totaling $600,payment is due upon delivery and installation of the sign.
11/12 You received full payment ofinvoice #9 from Red Fische.
11/15 You sent invoice #11 to IgottaTrouble for 15 hours of Hourly Accounting Services.
11/18 Ima Payne walks into your officeneeding assistance with Quickbooks Online. You pull up her businessand fix her problems. You issue invoice #12 to Ima for 4 hours ofHourly Accounting Services. Ima pays you $1,000 in cash.
11/25 You remitted payment to the U.STreasury for the federal income taxes, FICA taxes and FUTA taxesrelated to the September payroll (check #120). In addition, youremitted payment to the Louisiana Department of Revenue (check#121) for the state income taxes and SUTA taxes related to theSeptember payroll.
11/30 You sent the following invoices,terms 1/10, net 30:
#13 toIgotta Troubles for 12 hours of Hourly Accounting Services
#14 to Red Fische for Monthly Accounting Services, and
#15 to Cooking For You for Monthly Accounting Services.
11/30 You accrued interest on the PigE. Bank note. Accrue interest based on the number of days in themonth.
11/30 You computed and accrued thepayroll for November.
11/30 You received monthly bills forthe following:
Max Power Company - $150, terms n/30
WaterWorks #1 - $20, terms n/30
Great Coverage Cellular - $50, terms n/30.
12/1 You paid the monthlyoffice rent of $500 by issuing check # 122.
12/2 You make the thirdmonthly payment to Pig E Banks by issuing check #123.
12/04 You purchase $100 of postagestamps and make payment from the petty cash account.
12/05 You issue check #124 to MandiHandi for the November payroll.
12/09 You received the followingchecks in the mail:
Check #1212 from Igotta Troubles in the amount of $4,000
Check #809 from Red Fische in the amount of $2,475
Check #2569 from Cooking For You in the amount of $1485.
12/12 You remitted payment to the U.STreasury for the federal income taxes, FICA taxes and FUTA taxesrelated to the October payroll (check #125). In addition, youremitted payment to the Louisiana Department of Revenue (check#126) for the state income taxes and SUTA taxes related to theOctober payroll.
12/15 You send invoice #16 to IgottaTroubles for 10 hours of Hourly Accounting Services.
12/20 Ima Payne is back and needsassistance filing Federal Tax Form 990 for her business. Youperform this service and hand her invoice #17 in the amount of $500for Tax Services. Ima pays you in cash.
12/22 You receive a check in theamount of $5,000 from Igotta Troubles.
12/24 You purchased gift cards fromEatin Moore Grocers, to give as Christmas gifts to your clients.Eatin Moore charged your account in the amount of $1000 and gaveyou the bill.
12/30 You sent the following invoices,terms 1/10, net 30:
#18 toIgotta Troubles for 10 hours of Hourly Accounting Services
#19 to Red Fische for Monthly Accounting Services, and
#20 to Cooking For You for Monthly Accounting Services.
12/30 You accrued interest on the PigE. Bank note. Accrue interest based on the number of days in themonth.
12/30 You computed and accrued thepayroll for December. In addition to paying the regular monthlysalary to Mandi Handi, you also authorize a Christmas bonus of $500for Mandi and $10,000 for yourself.
12/30 You received monthly bills forthe following:
Max Power Company - $170, terms n/30
WaterWorks #1 - $20, terms n/30
Great Coverage Cellular - $50, terms n/30
Chart of Accounts:
Cash | 105 |
Petty Cash | 107 |
Accounts Receivable | 110 |
Supplies on Hand | 130 |
Prepaid Insurance | 140 |
Computer Equipment | 220 |
Accumulated Depreciation â ComputerEquipment | 221 |
Cell Phone | 230 |
Accumulated Depreciation â CellPhone | 231 |
Vehicles | 240 |
Accumulated Depreciation - Vehicles | 241 |
Accounts Payable | 310 |
Customer Deposits (Unearned Revenue) | 320 |
SUTA Payable | 330 |
FICA Payable | 332 |
FUTA Payable | 334 |
Federal Income Tax Payable | 336 |
State Income Tax Payable | 338 |
Current Maturities of Long-Term Debt | 375 |
Notes Payable (long-term) | 410 |
Interest Payable | 420 |
Salaries Payable | 425 |
Common Stock ($2 par value) | 520 |
Additional Paid-in Capital on Common Stock | 521 |
Retained Earnings | 550 |
Dividends | 560 |
Engagement fees | 605 |
Monthly Accounting Services Revenue | 610 |
Hourly Accounting Services Revenue | 620 |
Tax Services Revenues | 612 |
Sales Discounts | 614 |
Advertising & Promotion Expense | 725 |
Depreciation Expense | 727 |
Rent Expense | 730 |
Insurance Expense | 735 |
Supplies Expense | 740 |
Meals & Entertainment | 745 |
Taxes and Licenses | 767 |
Telephone Expense | 770 |
Utilities Expense | 775 |
Fuel Expense | 780 |
Interest Expense | 820 |
Payroll Tax Expense | 825 |
Salaries Expense | 830 |
Income Summay | 900 |
Related questions
In proper General Journal format,record the transactions for the month; include descriptions of eachtransaction with your journal entry. Use only the accounts shown inthe chart of accounts.
8/1 YOUfiled a charter with the State of Louisiana to form the YOURAccounting Corporation. The charter authorizes you to issue 5000shares of $2 par common stock. The state charged you a $75 fee tofile the charter. Since your business is not yet approved, you hadto pay this fee using personal funds.
9/1 Youreceived your charter from the State of Louisiana and officiallyopened your business. Your first order of business wasto become a shareholder of YOUR Accounting Corp. To do this, youpurchased 500 shares of common stock by issuing a check to YOURAccounting Corp for $10,000. You used this money to open a checkingaccount at First Funds Bank.
9/1 Yourented an office for YOUR Accounting Corp. The monthly rent is$500, with the first monthâs rent due immediately. You issue check#100 to Office Builders for the first monthâs rent.
9/2 Youthen went to the Apple store and purchased a new computer systemfor your business. Your Mac Pro cost $2700 and your new printercost $450. You set up a 30-day account with Apple to make thispurchase.
9/3 Youordered business cards and stationary from Marketing Media onaccount. The order totaled $250 and will be shipped FOBDestination. (Record all purchases of supplies in the Supplies onHand account).
9/4 Youdecided to purchase a new vehicle for your business. Upon visitingPro-Auto, you decide on a new SUV at a cost of $55,000. Thisvehicle will be used 100% for business purposes. You finance thevehicle with Pig E Bank at a rate of 5% for 6 years. Your firstmonthly payment is due on October 4.
NOTE: You will need to create a loan amortization schedule todetermine the amount of the monthly note and the interest expensefor each month. You can use a website such as www.bankrate.com tocreate the schedule. When recording your journal entries, round allamounts to the nearest dollar.
9/5 Youwent to the KEM Supply to purchase supplies for your business at acost of $600. KEM opened a customer charge account for you. Thepayment terms on your account will be 2/10, net 30. The time periodfor determining the payment amount begins on the purchase date.
9/6 Youpurchased a one-year auto insurance policy from InsureMart for$1200. InsureMart will send you a bill for the policy. YOURAccounting Corporation capitalizes all insurance policies on thedate of purchase and records the necessary expense at year-end asan adjusting entry.
9/10 Your firstclient, Red Fische, came in today needing assistance with filingthe appropriate paperwork to start his new seafood restaurant. Youissued invoice #1 to Red Fische and he paid you an initial $2,000Engagement Fee. Red Fische also agreed to contract with you toprovide accounting services for $2,500 per month.
9/12 You issue check#101 to YOUR Accounting Corp to establish a $500 Petty Cash Fund.You will use this account to make small cash purchases.
9/12 You reimburseyourself for the filing fees associated with forming yourcorporation.
9/14 You paid KEM Supply by issuingcheck #102
9/15 You hire anadministrative assistant, Mandi Handi, she will be paid a monthlysalary of $1500. You have decided that all pay periods will end onthe last day of the month and that checks will be issued on the5th of each month.
NOTE: Assume the following rates when preparing the payroll:federal income tax 15%, state income tax 5%, and FICA 7.65%.
YOUR Accounting Corp. has state and federal unemployment insurancerates of 1% (FUTA) and 2% (SUTA) on the first $7,700 of wages peremployee. The employer FICA rate is 7.65%.
9/16 Marketing Mediadelivered your business cards and stationary. Check #103 was issuedto pay for the supplies.
9/20 You visited anew client, Anita Cooke, to set up a Quickbooks accounting systemfor her new business, Cooking For You. You gave Anita and invoice#2 for the Engagement Fee and she paid you by issuing a check inthe amount of $2,000. Anita also agreed to a monthly fee of $1,500for you to handle her ongoing accounting needs.
9/22 You purchased$50 of fuel for your new SUV from Get ân Go. You charged this toyour Get ân Go account.
9/30 Mandi sentpro-rated invoices, #3 & #4 , to Red Fische and Cooking For Youfor Monthly Accounting Services. The payment terms are 1/10, net30.
9/30 You accruedinterest on the Pig E. Bank note. Accrue interest based on thenumber of days in the month.
9/30 You computedand accrued the payroll for September.
9/30 You receivedmonthly bills for the following:
Max Power Company - $100, terms n/30
WaterWorks #1 - $20, terms n/30.
CHART OF ACCOUNTS:
| Cash | 105 | ||
| Petty Cash | 107 | ||
| Accounts Receivable | 110 | ||
| Supplies on Hand | 130 | ||
| Prepaid Insurance | 140 | ||
| Computer Equipment | 220 | ||
| AccoumulatedDepreciation - Computer Equipment | 221 | ||
| Cell Phone | 230 | ||
| AccoumulatedDepreciation - Cell Phone | 231 | ||
| Vehicles | 240 | ||
| AccumulatedDepreciation - Vehicles | 241 | ||
| Accounts Payable | 310 | ||
| Customer Deposits (UnearnedRevenue) | 320 | ||
| SUTA Payable | 330 | ||
| FICA Payable | 332 | ||
| FUTA Payable | 334 | ||
| Federal Income TaxPayable | 336 | ||
| State Income Tax Payable | 338 | ||
| Current Maturities ofLong-Term Debt | 375 | ||
| Notes Payable (long-term) | 410 | ||
| Interest Payable | 420 | ||
| Salaries Payable | 425 | ||
| Common Stock ($2 parvalue) | 520 | ||
| Additional Paid-in Capital onCommon Stock | 521 | ||
| Retained Earnings | 550 | ||
| Dividends | 560 | ||
| Engagement Fees | 605 | ||
| Monthly Accounting ServicesRevenue | 610 | ||
| Hourly Accounting ServicesRevenue | 620 | ||
| Tax Services Revenue | 612 | ||
| Sales Discounts | 614 | ||
| Advertising & PromotionExpense | 725 | ||
| Depreciation Expense | 727 | ||
| Rent Expense | 730 | ||
| Insurance Expense | 735 | ||
| Supplies Expense | 740 | ||
| Meals & Entertainment | 745 | ||
| Taxes & Licenses | 767 | ||
| Telephone Expense | 770 | ||
| Utilities Expense | 775 | ||
| Fuel Expense | 780 | ||
| Interest Expense | 820 | ||
| Payroll Tax Expense | 825 | ||
| Salaries Expense | 830 | ||
| Income Summary | 900 | ||
8/1 YOU filed a charter withthe State of Louisiana to form the YOUR Accounting Corporation. Thecharter authorizes you to issue 5000 shares of $2 par common stock.The state charged you a $75 fee to file the charter. Since yourbusiness is not yet approved, you had to pay this fee usingpersonal funds.
9/1 You received yourcharter from the State of Louisiana and officially opened yourbusiness. Your first order of business was to become ashareholder of YOUR Accounting Corp. To do this, you purchased 500shares of common stock by issuing a check to YOUR Accounting Corpfor $10,000. You used this money to open a checking account atFirst Funds Bank.
9/1 You rented an office forYOUR Accounting Corp. The monthly rent is $500, with the firstmonthâs rent due immediately. You issue check #100 to OfficeBuilders for the first monthâs rent.
9/2 You then went to theApple store and purchased a new computer system for your business.Your Mac Pro cost $2700 and your new printer cost $450. You set upa 30-day account with Apple to make this purchase.
9/3 You ordered businesscards and stationary from Marketing Media on account. The ordertotaled $250 and will be shipped FOB Destination. (Record allpurchases of supplies in the Supplies on Hand account).
9/4 You decided to purchasea new vehicle for your business. Upon visiting Pro-Auto, you decideon a new SUV at a cost of $55,000. This vehicle will be used 100%for business purposes. You finance the vehicle with Pig E Bank at arate of 5% for 6 years. Your first monthly payment is due onOctober 4.
NOTE: You will need to create a loan amortization schedule todetermine the amount of the monthly note and the interest expensefor each month. You can use a website such as www.bankrate.com tocreate the schedule. When recording your journal entries, round allamounts to the nearest dollar.
9/5 You went to the KEMSupply to purchase supplies for your business at a cost of $600.KEM opened a customer charge account for you. The payment terms onyour account will be 2/10, net 30. The time period for determiningthe payment amount begins on the purchase date.
9/6 You purchased a one-yearauto insurance policy from InsureMart for $1200. InsureMart willsend you a bill for the policy. YOUR Accounting Corporationcapitalizes all insurance policies on the date of purchase andrecords the necessary expense at year-end as an adjustingentry.
9/10 Your first client, Red Fische, came intoday needing assistance with filing the appropriate paperwork tostart his new seafood restaurant. You issued invoice #1 to RedFische and he paid you an initial $2,000 Engagement Fee. Red Fischealso agreed to contract with you to provide accounting services for$2,500 per month.
9/12 You issue check #101 to YOUR AccountingCorp to establish a $500 Petty Cash Fund. You will use this accountto make small cash purchases.
9/12 You reimburse yourself for the filingfees associated with forming your corporation.
9/14 You paid KEM Supply by issuing check #102
9/15 You hire an administrative assistant,Mandi Handi, she will be paid a monthly salary of $1500. You havedecided that all pay periods will end on the last day of the monthand that checks will be issued on the 5th of eachmonth.
NOTE: Assume the following rates when preparing the payroll:federal income tax 15%, state income tax 5%, and FICA 7.65%.
YOUR Accounting Corp. has state and federal unemployment insurancerates of 1% (FUTA) and 2% (SUTA) on the first $7,700 of wages peremployee. The employer FICA rate is 7.65%.
9/16 Marketing Media delivered your businesscards and stationary. Check #103 was issued to pay for thesupplies.
9/20 You visited a new client, Anita Cooke, toset up a Quickbooks accounting system for her new business, CookingFor You. You gave Anita and invoice #2 for the Engagement Fee andshe paid you by issuing a check in the amount of $2,000. Anita alsoagreed to a monthly fee of $1,500 for you to handle her ongoingaccounting needs.
9/22 You purchased $50 of fuel for your newSUV from Get ân Go. You charged this to your Get ân Go account.
9/30 Mandi sent pro-rated invoices, #3  , to Red Fische and Cooking For You for Monthly AccountingServices. The payment terms are 1/10, net 30.
9/30 You accrued interest on the Pig E. Banknote. Accrue interest based on the number of days in the month.
9/30 You computed and accrued the payroll forSeptember.
9/30 You received monthly bills for thefollowing:
Max Power Company - $100, terms n/30
WaterWorks #1 - $20, terms n/30.
CHART OF ACCOUNTS
Cash | 105 |
Petty Cash | 107 |
Accounts Receivable | 110 |
Supplies on Hand | 130 |
Prepaid Insurance | 140 |
Computer Equipment | 220 |
Accumulated Depreciation â ComputerEquipment | 221 |
Cell Phone | 230 |
Accumulated Depreciation â CellPhone | 231 |
Vehicles | 240 |
Accumulated Depreciation - Vehicles | 241 |
Accounts Payable | 310 |
Customer Deposits (Unearned Revenue) | 320 |
SUTA Payable | 330 |
FICA Payable | 332 |
FUTA Payable | 334 |
Federal Income Tax Payable | 336 |
State Income Tax Payable | 338 |
Current Maturities of Long-Term Debt | 375 |
Notes Payable (long-term) | 410 |
Interest Payable | 420 |
Salaries Payable | 425 |
Common Stock ($2 par value) | 520 |
Additional Paid-in Capital on Common Stock | 521 |
Retained Earnings | 550 |
Dividends | 560 |
Engagement fees | 605 |
Monthly Accounting Services Revenue | 610 |
Hourly Accounting Services Revenue | 620 |
Tax Services Revenues | 612 |
Sales Discounts | 614 |
Advertising & Promotion Expense | 725 |
Depreciation Expense | 727 |
Rent Expense | 730 |
Insurance Expense | 735 |
Supplies Expense | 740 |
Meals & Entertainment | 745 |
Taxes and Licenses | 767 |
Telephone Expense | 770 |
Utilities Expense | 775 |
Fuel Expense | 780 |
Interest Expense | 820 |
Payroll Tax Expense | 825 |
Salaries Expense | 830 |
Income Summay | 900 |
ASSIGNMENT
In proper General Journal format,record the transactions for the month; include descriptions of eachtransaction with your journal entry. Use only the accounts shown inthe chart of accounts.
