24E_2 - Horngren'S Financial And Managerial Accounting

Question

Question: Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance The following transactions occurred during the month for Teresa Parker, CPA: 

Jun. 1 Parker opened an accounting firm by contributing \(13,200 cash and office furniture with a fair market value of \)5,300 in exchange for common stock. 

5 Paid monthly rent of \(1,300. 

9 Purchased office supplies on account, \)600. 

14 Paid employee’s salary, \(1,900. 

18 Received a bill for utilities to be paid next month, \)370. 

21 Paid \(500 of the accounts payable created on June 9. 

25 Performed accounting services on account, \)5,700. 

28 Paid cash dividends of $6,700

Requirements 2. Journalize the transactions, and then post the journal entries to the four-column accounts. Explanations are not required for the journal entries. Keep a running balance in each account. Assume the journal entries are recorded on page 10 of the journal.

Step-by-Step Solution

Answer

The required journal entries are passed in step 1 and four-column accounts is also prepared in step 2.

Step-by-Step Solution Step 1:Journal Entries

	Journal entry
Date	Particulars	Debit ($)	Credit ($)
June
1	Cash	$13,200
	Office Furniture	$5,300
	Common Stock		$18,500
5	Rent Expense	$1,300
	Cash		$1,300
9	Office Supplies	$600
	Accounts Payable		$600
14	Salary Expense	$1,900
	Cash		$1,900
18	Utilities Expense	$370
	Utilities Payable		$370
21	Accounts Payable	$600
	Cash		$600
25	Accounts Receivables	$5,700
	Service Revenue		$5,700
28	Dividends	$6,700
	Cash		$6,700

Step 2: Opening of Accounts

Cash                                                                                                                               Account Number - 110
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jun 1	Common stock		$13,200		$13,200
5	Rent Expense			$1,300	$11,900
14	Salary Expense			$1,900	$10,000
21	Accounts Payable			$500	$9,500
28	Dividends			$6,700	$2,800

 

Accounts Receivables                                                                                                   Account Number - 120
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 25	Service Revenue		$5,700		$5,700

 

Office Supplies                                                                                                              Account Number - 130
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 9	Accounts Payable		$600		$600

 

Office Furniture                                                                                                            Account Number - 140
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jun 1	Common stock		$5,300		$5,300

 

Accounts Payable                                                                                                           Account Number - 210
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 9	Office Supplies			$600		$600
June 21	Cash		$500			$100

 

Utilities Payable                                                                                                            Account Number - 220
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 18	Utility Expense			$370		$370

 

Common Stock                                                                                                                Account Number - 310
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jun 1	Cash			$13,200		$13,200
	Furniture			$5,300		$5,300

 

Dividends                                                                                                                         Account Number - 320
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 28	Cash		$6,700		$6,700

 

Service Revenue                                                                                                             Account Number - 410
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 25	Accounts Receivables			$5,700		$5,700

 

 

Salaries Expense                                                                                                             Account Number - 510
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 14	Cash		$1,900		$1,900

 

 

Rent Expense                                                                                                                   Account Number – 520
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 5	Cash		$1,300		$1,300

 

 

Utilities Expense                                                                                                Account Number - 530
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
June 18	Utilities Payable		$370		$370