Answered: On June 1, 2016, Kim Wheeler…

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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Question

Journal Entries and Trial Balance

On June 1, 2016, Kim Wheeler established an interior decorating business, Intrex Designs. During the month, Kim completed the following transactions related to the business.

June	1	Kim transferred cash from a personal bank account to an account to be used for the business, $21,700.
	4	Paid rent for period of June 4 to end of month, $2,100.
	6	Purchased a truck for $18,000, paying $2,000 cash and giving a note payable for the remainder.
	8	Purchased equipment on account, $8,460.
	10	Purchased supplies for cash, $1,450.
	12	Paid annual premiums on property and casualty insurance, $3,260.
	15	Received cash for job completed, $9,110.
	23	Paid creditor a portion of the amount owed for equipment purchased on June 13, $3,020.
	24	Recorded jobs completed on account and sent invoices to customers, $10,370.
	25	Received an invoice for truck expenses, to be paid in July, $950.
	26	Paid utilities expense, $1,090.
	27	Paid miscellaneous expenses, $390.
	28	Received cash from customers on account, $4,340.
	29	Paid wages of employees, $2,890.
	30	Withdrew cash for personal use, $2,410.

Required:

1. 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.) Journal entry explanations may be omitted. For a compound transaction, if an amount box does not require an entry, leave it blank.

11 Cash	31 Kim Wheeler, Capital
12 Accounts Receivable	32 Kim Wheeler, Drawing
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

General Journal	Page 1
Date	Description	Post. Ref.	Debit	Credit
2016
June 1

June 4

June 6


June 8

June 10

June 12

June 15

General Journal	Page 2
Date	Description	Post. Ref.	Debit	Credit
2016
June 23

June 24

June 25

June 26

June 27

June 28

June 29

June 30

2. Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in the general journal as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. If an amount box does not require an entry, leave it blank.

General Ledger
Account	Cash		ACCOUNT NO.	11
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 1
June 4
June 6
June 10
June 12
June 15
June 23
June 26
June 27
June 28
June 29
June 30

Account	Accounts Receivable		ACCOUNT NO.	12
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 24
June 28

Account	Supplies		ACCOUNT NO.	13
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 10

Account	Prepaid Insurance		ACCOUNT NO.	14
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 12

Account	Equipment		ACCOUNT NO.	16
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 8

Account	Truck		ACCOUNT NO.	18
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 6

Account	Notes Payable		ACCOUNT NO.	21
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 6

Account	Accounts Payable		ACCOUNT NO.	22
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 8
June 23
June 25

Account	Kim Wheeler, Capital		ACCOUNT NO.	31
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 1

Account	Kim Wheeler, Drawing		ACCOUNT NO.	32
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 30

Account	Fees Earned		ACCOUNT NO.	41
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 15
June 24

Account	Wages Expense		ACCOUNT NO.	51
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 29

Account	Rent Expense		ACCOUNT NO.	53
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 4

Account	Utilities Expense		ACCOUNT NO.	54
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 26

Account	Truck Expense		ACCOUNT NO.	55
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 25

Account	Miscellaneous Expense		ACCOUNT NO.	59
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 27

3. Prepare an unadjusted trial balance for Intrex Designs as of June 30, 2016. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example.

Intrex Designs Unadjusted Trial Balance June 30, 2016
	Debit Balances	Credit Balances
Cash
Accounts Receivable














Totals

4. Determine the excess of revenues over expenses for June.

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