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Val Wightman

Exercise 2-4 Need to complete all worksheets on the example


Preparing general journal
entries

Prepare general journal entries for the following transactions of a new business called Pose for Pics.
Aug. 1 Hashim Paris, the owner, invested $7,500 cash and $32,500 of photography equipment in
the business.
1 Paid $3,000 cash for an insurance policy covering the next 24 months.
5 Purchased office supplies for $1,400 cash.
20 Received $2,650 cash in photography fees earned.
31 Paid $875 cash for August utilitie

Pose for Pics

Date PR Debit Credit


Aug 1
Cash 101 7,500
Photo Equipment 32,500
Investment by owner 40,000

Cash 101 3,000


Insurance policy for 24 mos. 108 3,000

Aug 5
Cash 101 1,400
Purchased supplies for cash 163 1,400

Aug 20
Cash 101 2,650
Photography fees earned 2,650

Aug 31
Cash 101 875
August utilities 875

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47,925 47,925

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Exercise 2-5 Need to complete all worksheets on the example


Preparing T-accounts anda trail balance

Use the information in Exercise 2-4 to prepare an August 31 trial balance for Pose-for-Pics. Open
these T-accounts: Cash; Office Supplies; Prepaid Insurance; Photography Equipment; H. Paris,
Capital; Photography Fees Earned; and Utilities Expense. Post the general journal entries to these
T-accounts (which will serve as the ledger), and prepare a trial balance.

Cash Office Supplies


Aug 1 7500 Aug-10 3000 Aug-10 1400
20 2650 5 1400
31 875
10150 5275
H. Paris, Capital
Aug-10 40000
Photography Equipment
Aug 1 32500

Prepaid Insurance Utilities Expense


Aug 5 3000 Aug-10 875

Photography Fees Earned


Aug-10 2650

Pose-for-Pics
Trial Balance
August 31
Debit Credit
Cash 4,875
Office Supplies 1,400
Prepaid Insurance 3,000
Photography Equipment 32,500

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H. Paris, Capital 40,000


Photography Fees Earned 2,650
Utilities Expense 875

Total 42,650 42,650

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Val Wightman

Problem 2-2A Journal entries see below. Need to complete all worksheets on the example

Shelton Engineering completed the following transactions in the month of June.


a. Shania Shelton, the owner, invested $105,000 cash, office equipment with a value of $6,000, and
$45,000 of drafting equipment to launch the business.
b. Purchased land worth $54,000 for an office by paying $5,400 cash and signing a long-term note
payable for $48,600.
c. Purchased a portable building with $75,000 cash and moved it onto the land acquired in b.
d. Paid $6,000 cash for the premium on an 18-month insurance policy.
e. Completed and delivered a set of plans for a client and collected $5,700 cash.
f. Purchased $22,500 of additional drafting equipment by paying $10,500 cash and signing a longterm
note payable for $12,000.
g. Completed $12,000 of engineering services for a client. This amount is to be received in 30 days.
h. Purchased $2,250 of additional office equipment on credit.
i. Completed engineering services for $18,000 on credit.
j. Received a bill for rent of equipment that was used on a recently completed job. The $1,200 rent
must be paid within 30 days.
k. Collected $7,200 cash in partial payment from the client described in transaction g.
l. Paid $1,500 cash for wages to a drafting assistant.
m. Paid $2,250 cash to settle the account payable created in transaction h.
n. Paid $675 cash for minor repairs to the drafting equipment.
o. Shelton withdrew $9,360 cash for personal use.
p. Paid $1,500 cash for wages to a drafting assistant.
q. Paid $3,000 cash for advertisements in the local newspaper during June.

1. Prepare general journal entries to record these transactions (use the account titles listed in
part 2).
2. Open the following accounts—their account numbers are in parentheses (use the balance column
format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163);

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Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable
(250); S. Shelton, Capital (301); S. Shelton, Withdrawals (302); Engineering Fees Earned (402);
Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs
Expense (604). Post the journal entries from part 1 to the accounts and enter the balance after
each posting.

Debit Credit
a.
Cash 101 105,000
Office Equipment 163 6,000
Drafting Equipment 164 45000
Shania Shelton, Capital 301 1560000

b. Land 172 54,000


Cash 101 5,400

Purchase of land with cash and note payable 48600

c.
Cash 101 75,000
Purchased building 170 75000

d.
Cash 101 6,000
Purchased 18-month insurance policy 108 6000

e.
Cash 101 5700
Payment for completed work 402 5700

f.

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Cash 101 10,500


Notes Payable 250 12000
Draft Equipment 164 22500
g.

Accounts Receivable 106 12000


Engineering Fees Earned 602 12000
h.

Office Equipment 163 2250


Account Payable 201 2250
i.

Account Receivable 106 18000


Engineering Fees Earned 402 18000
j.
Account Payable 201 1,200
Equipment Rental Expense 602 1200

k.
Cash 101 7200
Accounts Receivable 106 7200

l.
Cash 101 1,500
Wages Expense 601 1500

m.
Cash 101 2,250
Accounts Payable 201 2250

n.
Cash 101 675
Repair Expense 604 675

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o.
Cash 101 9,360
S. Shelton. Withdrawls 302 9360

p.
Cash 101 1,500
Wages Expense 602 1500

q.
Cash 101 3,000
Advertising fees 603 3000

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2-2A T-accounts Post the journal entries from part 1 to the accounts and enter the balance after each posting
Need to complete all worksheets on the example
Cash No. 101 Accounts Payable No. 201
Date Debit Credit Balance Date Debit Credit Balance
105,000 5400 99,600 2,250
75,000 24,600 1,200
6,000 18,600 2,250 1,200
5700 24,300
10,500 13,800 Notes Payable No. 250
7200 21,000 Date Debit Credit Balance
1,500 19,500 48,600
2,250 17,250 12,000
675 16,575 60600
9,360 7,215
1,500 5,712 S. Shelton, Capital No. 301
3,000 2,715 Date Debit Credit Balance
Accounts Receivable No. 102 156,000
Date Debit Credit Balance 156,000
12000
18000 S. Shelton, Withdrawals No. 302
7,200 Date Debit Credit Balance
22800 9,360
Prepaid Insurance No. 108 9360
Date Debit Credit Balance Engineering Fees Earned 402
6,000 Date Debit Credit Balance
6000 18,000
Office Equiment No. 163 5,700
Date Debit Credit Balance 12,000
6,000 35700

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6,000 Wages Expense No. 601


Date Debit Credit Balance
Drafting Equipment No. 164 1,500
Date Debit Credit Balance 1,500 3,000
45,000
22,500 Equipment Rental Expense No. 602
2250 69750 Date Debit Credit Balance
Building No. 170 1,200
Date Debit Credit Balance 1200
75,000 Advertising Expense 603
75000 Date Debit Credit Balance
Land No. 172 3,000
Date Debit Credit Balance 3000
54,000 Repairs Expense No. 604
54000 Date Debit Credit Balance
675
675

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Val Wightman

2-2A 3. Prepare a trial balance as of the end of this month’s operations


Need to complete all worksheets on the example

Shelton Engineering
Trial Balance
June 30
Debit Credit
Cash 2,715
Accounts receivable 22,800
Prepaid Insurance 6,000
Office Equipment 6,000
Drafting Equipment 69,750
Building 75,000
Land 54,000
Accounts Payable 1200
Notes Payable 60,600
S. Shelton, Capital 156,000
S. Shelton, Withdrawals 9,360
Engineering Fees earned 35,700
Wages Expense 3,000
Equipment Rental Expense 1,200
Advertising Expense 3,000
Repairs Expense 675

Total 253,500 253,500

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