Q38PGB_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 John Menning, CPA, is dated March 31, 2018: 

Cash                                              17,000

Office Supplies                            1,200

Accounts Receivable                  10,500

Land                                              29,000

Furniture                                     0

Automobile                                 0

Accounts Payable                                                        3,800

Unearned Revenue                                                     0

Common Stock                                                             46,200

Dividends                                      0                 

Rent Expense                              1,000

Salaries Expense                        2,500

Service Revenue                                                          11,200

Total Balance                    \( 61,200                           61,200

 

 

During April, the business completed the following transactions: 

Apr. 4 Collected \)6,000 cash from a client on account. 

8 Performed tax services for a client on account, \(5,500. 

13 Paid \)3,300 on account. 

14 Purchased furniture on account, \(4,000. 

15 Menning contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of \)11,500. 

18 Purchased office supplies on account, \(1,600. 

19 Received \)2,750 for tax services performed on April 8. 

20 Paid cash dividends of \(7,500. 

21 Received \)4,900 cash for consulting work completed. 

24 Received \(2,500 cash for accounting services to be completed next month. 

27 Paid office rent, \)900. 

28 Paid employee salary, $1,200.

 

Requirements 

1. Record the April transactions in the journal using 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

Journalising is the recording of journal entries and the required entries are prepared in step 2.

Step 1: Definition of Journalising

Journalising  is defined as the process of recording the business transaction according to dates. It is the first step of accounting.

Step 2: Recording Journal Entries

Date	Particulars	Debit ($)	Credit ($)
Apr
4	Cash	$6,000
	Accounts Receivables		$6,000
	(Cash Received from clients)
8	Accounts Receivables	$5,500
	Service Revenue		$5,500
	(Service provided to the client on credit)
13	Accounts Payable	$3,300
	Cash		$3,300
	(Cash Paid against accounts Payable)
14	Furniture	$4,000
	Accounts Payable		$4,000
	(Furniture purchased on credit)
15	Automobile	$11,500
	Common Stock		$11,500
	(Common Stock Issued for the automobile)
18	Office Supplies	$1,600
	Accounts Payable		$1,600
	(Office supplies purchased on credit)
19	Cash	$2,750
	Accounts Receivables		$2,750
	(Cash received from clients)
20	Dividends	$7,500
	Cash		$7,500
	(Cash dividend paid)
21	Cash	$4,900
	Service Revenue		$4,900
	(Cash received for providing the services)
24	Cash	$2,500
	Unearned Revenue		$2,500
	(Cash received for services to be provided in future)
27	Rent Expense	$900
	Cash		$900
	(Rent expense paid)
28	Salary Expense	$1,200
	Cash		$1,200
	(Salary Expense paid)