Q32PGA_1 - Horngren'S Financial And Managerial Accounting

Question

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

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions: 

Cash                                              11,000

Office Supplies                            400

Accounts Receivable                  16,500

Land                                              30,000

Furniture                                     0

Automobile                                 0

Accounts Payable                                                        3,800

Unearned Revenue                                                     0

Common Stock                                                             52,300

Dividends                                      0                 

Rent Expense                              800

Salaries Expense                        5,600

Service Revenue                                                          8,200

Total Balance                    \( 64,300                           64,300

During April, the business completed the following transactions: 

Apr. 4 Collected \)2,500 cash from a client on account. 

8 Performed tax services for a client on account, \(5,400. 

13 Paid \)3,000 on account. 

14 Purchased furniture on account, \(3,600. 

15 Merry contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of \)9,500. 

18 Purchased office supplies on account, \(900. 

19 Received \)2,700 for tax services performed on April 8. 

20 Paid cash dividends of \(6,500. 

21 Received \)5,700 cash for consulting work completed. 

24 Received \(2,400 cash for accounting services to be completed next month. 

27 Paid office rent, \)600. 

28 Paid employee salary, $1,700.

Requirements 

1. Record the April transactions in the journal. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Furniture; Automobile; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; and Rent Expense. Include an explanation for each entry

Step-by-Step Solution

Answer

Required journal entries are passed in Step 2.

Step 1 Definition of Accounts Receivables

Accounts receivables are defined as the balance sheet item representing the amount owed to the business by the clients or customers.

Step 2 Recording Journal Entries

	Journal entry
Date	Particulars	Debit ($)	Credit ($)
Apr
4	Cash	$2,500
	Accounts Receivables		$2,500
	(Cash Received from clients)
8	Accounts Receivables	$5,400
	Service Revenue		$5,400
	(Service provided to the client on credit)
13	Accounts Payable	$3,000
	Cash		$3,000
	(Cash Paid against accounts Payable)
14	Furniture	$3,600
	Accounts Payable		$3,600
	(Furniture purchased on credit)
15	Automobile	$9,500
	Common Stock		$9,500
	(Common Stock Issued for the automobile)
18	Office Supplies	$900
	Accounts Payable		$900
	(Office supplies purchased on credit)
19	Cash	$2,700
	Accounts Receivables		$2,700
	(Cash received from clients)
20	Dividends	$6,500
	Cash		$6,500
	(Cash dividend paid)
21	Cash	$5,700
	Service Revenue		$5,700
	(Cash received for providing the services)
24	Cash	$2,400
	Unearned Revenue		$2,400
	(Cash received for services to be provided in future)
27	Rent Expense	$600
	Cash		$600
	(Rent expense paid)
28	Salary Expense	$1,700
	Cash		$1,700
	(Salary Expense paid)