Q38PGB_3 - 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                                              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 2. Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11; Accounts Receivable, 12; Office Supplies, 13; Land, 14; Furniture, 15; Automobile, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52.

Step-by-Step Solution

Answer

The unearned revenue is the amount received for services not yet paid and required four-column accounts are prepared.

Step 1: Definition of Unearned Revenue

The unearned revenue is defined as the revenue for which the amount is received and the services are not yet provided.

Step 2: Preparation of Four-Column Accounts

Cash                                                                     Account Number – 11
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Apr					$17,000
4	Accounts Receivables		$6,000		$23,000
13	Accounts Payable			$3,300	$19,700
19	Accounts Receivables		$2,750		$22,450
20	Dividends			$7,500	$14,950
21	Service Revenue		$4,900		$19,850
24	Unearned Revenue		$2,500		$22,350
27	Rent Expense			$900	$21,450
28	Salary Expense			$1,200	$20,250

Accounts Receivables                                     Account Number – 12
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$10,500
Apr 4	Cash			$6,000	$4,500
8	Service Revenue		$5,500		$10,000
19	Cash			$2,750	$7,250

Office Supplies                                                     Account Number - 13
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$1,200
Apr 18	Accounts Payable		$1,600		$2,800

Land                                                                                       Account Number – 14
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$29,000

Furniture                                                                     Account Number – 15
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$0
Apr 14	Accounts Payable		$4,000		$4,000

Automobile                                                               Account Number – 16
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$0
Apr 15	Common Stock		$11,500		$11,500

Accounts Payable                                                                                                                       Account Number - 21
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
						$3,800
Apr 13	Cash		$3,300			$500
14	Furniture			$4,000		$4,000
18	Office Supplies			$1,600		$5,600

Unearned Revenue                                                           Account Number – 22
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
						$0
Apr 24	cash			$2,500		$2,500

Common Stock                                             Account Number – 31
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
						$46,200
Apr 15	Automobile			$11,500		$57,700

Dividends                                                                           Account Number – 33
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$0
Apr 20	Cash		$7,500		$7,500

Service Revenue                                                 Account Number – 41
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
						$11,200
Apr 8	Accounts Receivables			$5,500		$16,700
Apr 21	Cash			$4,900		$21,600

Salaries Expense                                                                 Account Number – 51
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$2,500
Apr 28	Cash		$1,200		$3,700

Rent Expense                                                                       Account Number – 52
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
					$1,000
Apr 27	Cash		$900		$1,900