Q 36PGB-3 - Horngren'S Financial And Managerial Accounting

Question

Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance 

Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions: 

Nov. 1 Received \(41,000 cash and issued common stock to Stewart. 

4 Purchased office supplies, \)1,200, and furniture, \(2,300, on account. 

6 Performed services for a law firm and received \)2,100 cash. 

7 Paid \(27,000 cash to acquire land to be used in operations. 

10 Performed services for a hotel and received its promise to pay the \)800 within one week. 

14 Paid for the furniture purchased on November 4 on account. 

15 Paid assistant’s semimonthly salary, \(1,470. 

17 Received cash on account, \)500. 

20 Prepared a design for a school on account, \(680. 

25 Received \)1,900 cash for design services to be performed in December. 

28 Received \(3,100 cash for consulting with Plummer & Gordon. 

29 Paid \)840 cash for a 12-month insurance policy starting on December 1. 

30 Paid assistant’s semimonthly salary, \(1,470. 30 Paid monthly rent expense, \)650. 

30 Received a bill for utilities, \(650. The bill will be paid next month. 

30 Paid cash dividends of \)2,800.b 

Requirements 3. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal

Step-by-Step Solution

Answer

Rent expense is the cost of using the property owned by another party and required t-account 

Step-by-Step Solution Step 1: Definition of Rent Expense

The rent expense is defined as the cost of using the property owned by some other party or the business.

Step 2: Recording Journal Entries

Cash
Nov 1     $41,000	$27,000          Nov 7
Nov 6     $2,100	$2,300            Nov 14
Nov 17   $500	$1,470           Nov 15
Nov 25   $1,900	$840              Nov 29
Nov 28   $3,100	$1,470            Nov 30
	$650               Nov 30
	$2,800          Nov 30
Bal.   $12,070

 

Accounts Receivables
Nov 10    $800	$500        Nov 17
Nov 20    $680
Bal.        $980

 

Office Supplies
Nov 4   $1,200
Bal        $1,200

 

Prepaid Insurance
Nov 29   $840
Bal       $840

 

Land
Nov 7     $27,000
Bal.        $27,000

 

 

Furniture
Nov 4   $2,300
Bal.      $2,300

 

 

Accounts Payable
Nov 14       $2,300	$3,500        Nov 4
	$1,200         Bal.

 

Utilities Payable
	$650        Nov 30
	$650       bal.

 

Unearned Revenue
	$1,900        Nov 25
	$1,900        Bal.

 

Common Stock
	$41,000          Nov 1
	$41,000        Bal.

 

Dividends
Nov 30    $2,800
Bal.        $2,800

 

Service Revenue
	$2,100         Nov 6
	$800        Nov 10
	$680           Nov 20
	$3,100        Nov 28
	$6,680       Bal.

 

Salaries Expense
Nov 15     $1,470
Nov 30     $1,470
Bal           $2,940

 

Rent Expense
Nov 30     $650
Bal.         $650

 

Utilities Expense
Nov 30        $650
Bal              $650