Can you help me with 2,3 and 4? On November 1, 20Y9, Lexi Martin established an interior decorating business, Heritage Designs. During the month, Lexi completed the following transactions related to the business: Nov. 1. Lexi transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $50,000. 1. Paid rent for period of November 1 to end of month, $4,000. 6. Purchased office equipment on account, $15,000. 8. Purchased a truck for $38,500 paying $5,000 cash and giving a note payable for the remainder. 10. Purchased supplies for cash, $1,750. 12. Received cash for job completed, $11,500. 15. Paid annual premiums on property and casualty insurance, $2,400. 23. Recorded jobs completed on account and sent invoices to customers, $22,300. 24. Received an invoice for truck expenses, to be paid in November, $1,250. Enter the following transactions on Page 2 of the two-column journal: 29. Paid utilities expense, $4,500. 29. Paid miscellaneous expenses, $1,000. 30. Received cash from customers on account, $9,000. 30. Paid wages of employees, $6,800. 30. Paid creditor a portion of the amount owed for equipment purchased on November 6, $3,000. 30. Paid dividends, $2,500.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Can you help me with 2,3 and 4?

On November 1, 20Y9, Lexi Martin established an interior decorating business, Heritage Designs. During the month, Lexi completed the following transactions related to the business:

Nov.	1.	Lexi transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $50,000.
	1.	Paid rent for period of November 1 to end of month, $4,000.
	6.	Purchased office equipment on account, $15,000.
	8.	Purchased a truck for $38,500 paying $5,000 cash and giving a note payable for the remainder.
	10.	Purchased supplies for cash, $1,750.
	12.	Received cash for job completed, $11,500.
	15.	Paid annual premiums on property and casualty insurance, $2,400.
	23.	Recorded jobs completed on account and sent invoices to customers, $22,300.
	24.	Received an invoice for truck expenses, to be paid in November, $1,250.

Enter the following transactions on Page 2 of the two-column journal:

29.		Paid utilities expense, $4,500.
29.		Paid miscellaneous expenses, $1,000.
30.		Received cash from customers on account, $9,000.
30.		Paid wages of employees, $6,800.
30.		Paid creditor a portion of the amount owed for equipment purchased on November 6, $3,000.
30.		Paid dividends, $2,500.

Instructions

Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.

11 Cash	31 Common Stock
12 Accounts Receivable	33 Dividends
13 Supplies	41 Fees Earned
14 Prepaid Insurance	51 Wages Expense
16 Equipment	53 Rent Expense
18 Truck	54 Utilities Expense
21 Notes Payable	55 Truck Expense
22 Accounts Payable	59 Miscellaneous Expense

Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.
Prepare an unadjusted trial balance for Heritage Designs as of November 30, 20Y9.

Answer
Check Figure: Total of Credit column: $111,450
Determine the excess of revenues over expenses for November.
Can you think of any reason why the amount determined in (4) might not be the net income for November?

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