Axia College Material

Appendix C Journalizing, Posting, and Preparing a Trial Balance

Journalizing the Transactions
Use this template to journalize the transactions for Jane Kent, Inc. The first two lines are completed for you. You might not require all the lines provided.

DATE
May 1

GENERAL JOURNAL ACCOUNT TITLE AND EXPLANATION Cash Common Stock (issued shares for cash)

REF. DEBIT 101 25,000 311 126 201 729 101 112 400 101 205 101 400 726 101 201 101 2,500

J1 CREDIT 25,000

3-May Supplies (Accounts Payable -- Read Supply Co.) 7-May Office rent (Cash - May rent) 11-May Accounts Receivable Service revenue (Tax assignment completed) 12-May Cash Unearned revenue (advance for consulting) 17-May Cash Service revenue (services to H. Arnold Co.) 31-May Salary expense Cash (secretary/receptionist salary) 31-May Accounts Payable Cash (paid 40% owed to Read Supply Co.)

2,500 900 900 2,100 2,100 3,500 3,500 1,200 1,200 2,000 2,000 1,000 1,000

To: Jane Kent, Inc. shareholders, creditors, and investors: The attached Excel file shows the companys transactions for the month of May. Financial accounting has several intentions: evaluate and plan business operations, and provide information to help investors and creditors determine whether or not a company is a good risk. The Excel file includes a general journal, a ledger, and a trial balance. The first step in compiling this information, journalizing, requires entering it into the general journal with account titles, reference numbers, transaction amounts in two columns, and the effects of each transaction. There is a separate entry for each transaction; each entry includes date, amount credited or debited, and a brief explanation. The second step, posting, requires copying the transactions to the ledger accounts. This gathers the records of the accounts so the ledger shows all information about changes to each account. It shows all assets, liabilities, and stockholders equity accounts. The third step is creating a trial balance page, showing a list of the accounts and their balances as of the end of May. Debit balances are in the left column and credit balances in the right. The trial balance checks and shows that the credits and debits are equal. The sums of the two columns should be the same. If they are not the same, we can use the trial balance to identify and correct errors in journalizing and posting. The account titles and their balances are listed; the debit and credit columns are totaled; and the two columns are equal. I trust that shareholders, creditors, and investors can now evaluate the risks and rewards of increased business with Jane Kent, Inc, and that Ms. Kent can evaluate and plan the companys future endeavors.

has several intentions: evaluate and plan business operations,

piling this information, journalizing, requires entering it into the ference numbers, transaction amounts in two columns, and the separate entry for each transaction; each entry includes date,

ting, requires copying the transactions to the ledger accounts. nts so the ledger shows all information about changes to each

ting a trial balance page, showing a list of the accounts and their

equal. The sums of the two columns should be the same. If they

are listed; the debit and credit columns are totaled; and the two

Axia College Material

Appendix C Journalizing, Posting, and Preparing a Trial Balance
Posting the Accounts
Post the ledger accounts for Jane Kent, Inc. on this General Ledger. The first line of the cash account is completed for you. Complete the remaining lines in the cash account, and the other eight accounts. You have nine accounts altogether.

GENERAL LEDGER Cash DATE EXPLANATION 1-May-2008 7-May 12-May 17-May 31-May 31-May Accounts Receivable DATE EXPLANATION 11-May Tax assignment Supplies DATE EXPLANATION 3-May Read Supply Co. Accounts Payable DATE EXPLANATION 3-May Read Supply Co. 31-May Read Supply Co. 40% balance Unearned Revenue DATE EXPLANATION 12-May Advance for consulting Common Stock DATE EXPLANATION 1-May Issued shares for cash Service Revenue DATE EXPLANATION 11-May Tax assignment completed 17-May Services to H. Arnold Co. Salaries Expense

REF. J1 J1 J1 J1 J1 J1

DEBIT CREDIT 25,000 900 3,500 1,200 2,000 1,000

REF. J1

DEBIT CREDIT 2,100

REF. J1

DEBIT

CREDIT 2,500.00

REF. J1 J1

DEBIT

CREDIT 2,500 1,000

REF. J1

DEBIT

CREDIT 3,500

REF. J1

DEBIT

CREDIT 25,000

REF. J1 J1

DEBIT CREDIT 2,100 1,200

DATE

EXPLANATION 31-May Receptionist/secretary

REF. J1

DEBIT CREDIT 2,000

Rent Expense DATE EXPLANATION 7-May Office rent

REF. J1

DEBIT CREDIT 900

s completed for you. ts altogether.

No. 101 BALANCE 25,000 21,600 27,200 28,400 26,400 25,400 No. 112 BALANCE 23,700 No. 126 BALANCE 22,500.00 No. 201 BALANCE 22,500 25,400 No. 205 BALANCE 27,200 No. 311 BALANCE 25,000 No. 400 BALANCE 23,700 28,400 No. 726

BALANCE 26,400 No. 729 BALANCE 21,600

Axia College Material

Appendix C Journalizing, Posting, and Preparing a Trial Balance
Preparing a Trial Balance
Prepare a trial balance dated May 31, 2008 for Jane Kent, Inc. Debit and Credit totals are double-underlined. You can place summation formulas in F17 and G17 to compute debit and credit totals. Otherwise, you can compute totals using a calculator, then enter totals directly.

JANE KENT, INC. Trial Balance

31-May-08 Cash Accounts Receivable Supplies Accounts Payable Unearned Revenue Common Stock Service Revenue Salaries Expense Rent Expense Totals DEBIT CREDIT 25,000 2,100 2,500 3,500 3,500 25,000 3,300 2,000 900 33,900 33,900