On November 2, 2006, Mark established an interior decorating business flourishing designs. During the remainder of the month, Mark completed the following transactions related to the business: Nov 2. Mark transferred cash form a personal bank account to an account to be used for the business in exchange for capital stock, $15000. Nov 5. Paid rent for period of November 5 to end of month, $1750. Nov 6. Purchased office equipment on account, $8500. Nov 8. Purchased a used truck for $18000, paying $5000 cash and giving a note payable for the remainder. Nov 10. Purchased supplies for cash, $1115. Nov 12. Received cash for job completed $7500. Nov 15. Paid annual premiums on property and casualty insurance $1400. Nov 23. Recorded jobs completed on account and sent invoices to customers, $3950. Nov 24. Received an invoice for truck expenses, to be paid in December, $600. Nov 29. Paid utilities expense, $750. Nov 29. Paid miscellaneous expense, $310. Nov 30. Received cash from customers on account, $2200. Nov 30. Paid wages of employees, $2700. Nov 30. Paid creditor a portion of the amount owed for equipment purchased on November 6, $2125. Nov 30. Paid dividends, $1,400. Instructions: Journalize each transaction in a two-column journal, 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 used. 11 Cash                                                 18 Truck                               41 Fees Earned 12 Accounts receivable                 21 Notes payable             51 Wages expense 13 Supplies                                         22 Accounts payable       53 Rent expense 14 Prepaid insurance                      31 Capital Stock                 54 Utilities expense 16 Equipment                                    33 Dividends                      55 Truck expense 55 Miscellaneous 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 a trial balance for flourishing designs as of November 30, 2006.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On November 2, 2006, Mark established an interior decorating business flourishing designs. During the remainder of the month, Mark completed the following transactions related to the business:

Nov 2. Mark transferred cash form a personal bank account to an account to be used for the business in exchange for capital stock, $15000.

Nov 5. Paid rent for period of November 5 to end of month, $1750.

Nov 6. Purchased office equipment on account, $8500.

Nov 8. Purchased a used truck for $18000, paying $5000 cash and giving a note payable for the remainder.

Nov 10. Purchased supplies for cash, $1115.

Nov 12. Received cash for job completed $7500.

Nov 15. Paid annual premiums on property and casualty insurance $1400.

Nov 23. Recorded jobs completed on account and sent invoices to customers, $3950.

Nov 24. Received an invoice for truck expenses, to be paid in December, $600.

Nov 29. Paid utilities expense, $750.

Nov 29. Paid miscellaneous expense, $310.

Nov 30. Received cash from customers on account, $2200.

Nov 30. Paid wages of employees, $2700.

Nov 30. Paid creditor a portion of the amount owed for equipment purchased on November 6, $2125.

Nov 30. Paid dividends, $1,400.

Instructions:

  1. Journalize each transaction in a two-column journal, 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 used.

11 Cash                                                 18 Truck                               41 Fees Earned

12 Accounts receivable                 21 Notes payable             51 Wages expense

13 Supplies                                         22 Accounts payable       53 Rent expense

14 Prepaid insurance                      31 Capital Stock                 54 Utilities expense

16 Equipment                                    33 Dividends                      55 Truck expense

55 Miscellaneous

  1. 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.
  2. Prepare a trial balance for flourishing designs as of November 30, 2006.

 

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