On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business: June 1. Kris transferred cash from a personal bank account to an account to be used for the business, $24,800. 4. Paid rent for period of June 4 to end of month, $2,410. 6. Purchased a used truck for $21,000, paying $2,000 cash and giving a note payable for the remainder. 8. Purchased equipment on account, $9,670. 10. Purchased supplies for cash, $1,660. 12. Paid annual premiums on property and casualty insurance, $3,720. 15. Received cash for job completed, $10,420. Enter the following transactions on Page 2 of the two-column journal: 23. Paid creditor a portion of the amount owed for equipment purchased on June 13, $3,450. 24. Recorded jobs completed on account and sent invoices to customers, $11,850. 25. Received an invoice for truck expenses, to be paid in July, $1,090. 26. Paid utilities expense, $1,240. 27. Paid miscellaneous expenses, $450. 28. Received cash from customers on account, $4,960. 29. Paid wages of employees, $3,300. 30. Withdrew cash for personal use, $2,750. 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 Kris Storey, Capital 12 Accounts Receivable 32 Kris Storey, 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 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 2019 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 2019 June 24 June 28 Account Supplies ACCOUNT NO. 13 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 10 Account Prepaid Insurance ACCOUNT NO. 14 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 12 Account Equipment ACCOUNT NO. 16 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 8 Account Truck ACCOUNT NO. 18 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 6 Account Notes Payable ACCOUNT NO. 21 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 6 Account Accounts Payable ACCOUNT NO. 22 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 8 June 23 June 25 Account Kris Storey, Capital ACCOUNT NO. 31 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 1 Account Kris Storey, Drawing ACCOUNT NO. 32 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 30 Account Fees Earned ACCOUNT NO. 41 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 15 June 24 Account Wages Expense ACCOUNT NO. 51 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 29 Account Rent Expense ACCOUNT NO. 53 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 4 Account Utilities Expense ACCOUNT NO. 54 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 26 Account Truck Expense ACCOUNT NO. 55 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 25 Account Miscellaneous Expense ACCOUNT NO. 59 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 27 3. Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 2019. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example. Eco-Centric DesignsUnadjusted Trial BalanceJune 30, 2019 Debit Balances Credit Balances Cash Accounts Receivable 4. Determine the excess of revenues over expenses for June.$ 5. Can you think of any reason why the amount determined in (4) might not be the net income for June? Fees earned includes some fees earned in the month of June that have not been received. Utilities expense includes expenses incurred for the month of June than have not yet been paid. Some supplies may have been used during June but no supplies expense has been recorded. Additions to capital has been wrongly recorded as drawings.

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business: June 1. Kris transferred cash from a personal bank account to an account to be used for the business, $24,800. 4. Paid rent for period of June 4 to end of month, $2,410. 6. Purchased a used truck for $21,000, paying $2,000 cash and giving a note payable for the remainder. 8. Purchased equipment on account, $9,670. 10. Purchased supplies for cash, $1,660. 12. Paid annual premiums on property and casualty insurance, $3,720. 15. Received cash for job completed, $10,420. Enter the following transactions on Page 2 of the two-column journal: 23. Paid creditor a portion of the amount owed for equipment purchased on June 13, $3,450. 24. Recorded jobs completed on account and sent invoices to customers, $11,850. 25. Received an invoice for truck expenses, to be paid in July, $1,090. 26. Paid utilities expense, $1,240. 27. Paid miscellaneous expenses, $450. 28. Received cash from customers on account, $4,960. 29. Paid wages of employees, $3,300. 30. Withdrew cash for personal use, $2,750. 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 Kris Storey, Capital 12 Accounts Receivable 32 Kris Storey, 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 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 2019 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 2019 June 24 June 28 Account Supplies ACCOUNT NO. 13 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 10 Account Prepaid Insurance ACCOUNT NO. 14 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 12 Account Equipment ACCOUNT NO. 16 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 8 Account Truck ACCOUNT NO. 18 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 6 Account Notes Payable ACCOUNT NO. 21 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 6 Account Accounts Payable ACCOUNT NO. 22 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 8 June 23 June 25 Account Kris Storey, Capital ACCOUNT NO. 31 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 1 Account Kris Storey, Drawing ACCOUNT NO. 32 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 30 Account Fees Earned ACCOUNT NO. 41 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 15 June 24 Account Wages Expense ACCOUNT NO. 51 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 29 Account Rent Expense ACCOUNT NO. 53 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 4 Account Utilities Expense ACCOUNT NO. 54 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 26 Account Truck Expense ACCOUNT NO. 55 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 25 Account Miscellaneous Expense ACCOUNT NO. 59 Balance Date Item Post. Ref. Debit Credit Debit Credit 2019 June 27 3. Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 2019. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example. Eco-Centric DesignsUnadjusted Trial BalanceJune 30, 2019 Debit Balances Credit Balances Cash Accounts Receivable 4. Determine the excess of revenues over expenses for June.$ 5. Can you think of any reason why the amount determined in (4) might not be the net income for June? Fees earned includes some fees earned in the month of June that have not been received. Utilities expense includes expenses incurred for the month of June than have not yet been paid. Some supplies may have been used during June but no supplies expense has been recorded. Additions to capital has been wrongly recorded as drawings.

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

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business:

June	1.	Kris transferred cash from a personal bank account to an account to be used for the business, $24,800.
	4.	Paid rent for period of June 4 to end of month, $2,410.
	6.	Purchased a used truck for $21,000, paying $2,000 cash and giving a note payable for the remainder.
	8.	Purchased equipment on account, $9,670.
	10.	Purchased supplies for cash, $1,660.
	12.	Paid annual premiums on property and casualty insurance, $3,720.
	15.	Received cash for job completed, $10,420.

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

	23.	Paid creditor a portion of the amount owed for equipment purchased on June 13, $3,450.
	24.	Recorded jobs completed on account and sent invoices to customers, $11,850.
	25.	Received an invoice for truck expenses, to be paid in July, $1,090.
	26.	Paid utilities expense, $1,240.
	27.	Paid miscellaneous expenses, $450.
	28.	Received cash from customers on account, $4,960.
	29.	Paid wages of employees, $3,300.
	30.	Withdrew cash for personal use, $2,750.

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 Kris Storey, Capital
12 Accounts Receivable	32 Kris Storey, 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

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
2019
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
2019
June 24
June 28

Account	Supplies		ACCOUNT NO.	13
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 10

Account	Prepaid Insurance		ACCOUNT NO.	14
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 12

Account	Equipment		ACCOUNT NO.	16
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 8

Account	Truck		ACCOUNT NO.	18
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 6

Account	Notes Payable		ACCOUNT NO.	21
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 6

Account	Accounts Payable		ACCOUNT NO.	22
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 8
June 23
June 25

Account	Kris Storey, Capital		ACCOUNT NO.	31
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 1

Account	Kris Storey, Drawing		ACCOUNT NO.	32
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 30

Account	Fees Earned		ACCOUNT NO.	41
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 15
June 24

Account	Wages Expense		ACCOUNT NO.	51
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 29

Account	Rent Expense		ACCOUNT NO.	53
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 4

Account	Utilities Expense		ACCOUNT NO.	54
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 26

Account	Truck Expense		ACCOUNT NO.	55
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 25

Account	Miscellaneous Expense		ACCOUNT NO.	59
	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2019
June 27

3. Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 2019. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example.

Eco-Centric Designs Unadjusted Trial Balance June 30, 2019
	Debit Balances	Credit Balances
Cash
Accounts Receivable

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

5. Can you think of any reason why the amount determined in (4) might not be the net income for June?

Fees earned includes some fees earned in the month of June that have not been received.
Utilities expense includes expenses incurred for the month of June than have not yet been paid.
Some supplies may have been used during June but no supplies expense has been recorded.
Additions to capital has been wrongly recorded as drawings.

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