### Educational Exercise: Understanding Journal Entries and Ledger Accounts#### Transactions of a New Company: Pose-for-Pics**Required Information:***The following information applies to the questions displayed below.***Transactions:**1. **August 1:** M. Harris, the owner, invested $14,580 cash and $62,350 of photography equipment in the company.2. **August 2:** The company paid $4,000 cash for an insurance policy covering the next 24 months.3. **August 5:** The company purchased supplies for $2,755 cash.4. **August 20:** The company received $2,950 cash from taking photos for customers.5. **August 31:** The company paid $885 cash for August utilities.**Task:**Open a ledger account for Cash in balance column format. Post general journal entries that impact cash from the above transactions to the ledger account for cash.---### Ledger Account for Cash**Ledger Account Number:** 101: Cash| Date | Description | Debit | Credit | Balance ||------------|-------------|-------|--------|---------|| | | | | || | | | | || | | | | || | | | | || | | | | |---### Explanation of Transactions and Ledger Entries1. **August 1 - Owner's Investment:** - **Debit:** Cash $14,580 - **Credit:** Owner’s Equity / Capital $14,580 - **Balance:** The initial cash balance after the owner's investment.2. **August 2 - Payment for Insurance Policy:** - **Debit:** Insurance Expense / Prepaid Insurance $4,000 - **Credit:** Cash $4,000 - **Balance:** Cash balance decreases by the amount paid for the insurance policy.3. **August 5 - Purchase of Supplies:** - **Debit:** Supplies $2,755 - **Credit:** Cash $2,755 - **Balance:** Cash balance decreases by the amount spent on supplies.4. **August 20 - Revenue from Taking Photos:** - **Debit:** Cash $2,950 - **Credit:** Revenue / Service Income $2,950 - **Balance:** Cash balance increases by the

T account: T account is a T-shaped appearance of the journal entries related to a specific account…

Required information The following information applies to the questions displayed below] Following are the transactions of a new company called Pose-for-Pics. August 1 M. Harris, the owner, invested $14,500 cash and $62,350 of photography equipment in the company. August 2 The company paid $4,000 cash for an insurance policy covering the next 24 months. August 5 The company purchased supplies for $2,755 cash. August 20 The company received $2,950 cash from taking photos for customers. August 31 The company paid $885 cash for August utilities.

Required information The following information applies to the questions displayed below] Following are the transactions of a new company called Pose-for-Pics. August 1 M. Harris, the owner, invested $14,500 cash and $62,350 of photography equipment in the company. August 2 The company paid $4,000 cash for an insurance policy covering the next 24 months. August 5 The company purchased supplies for $2,755 cash. August 20 The company received $2,950 cash from taking photos for customers. August 31 The company paid $885 cash for August utilities.

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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MAKE A JOURNAL ENTRY
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Yi Min started an engineering firm called Min Engineering. He began operations and completed seventransactions in May, which included his initial investment of $18,000 cash. After those seven transactions,the ledger included the following accounts with normal balances. Cash . . . . . . . . . . . . . . . . . . $37,600Office supplies. . . . . . . . . . 890Prepaid insurance. . . . . . . 4,600Office equipment. . . . . . . $12,900Accounts payable. . . . . . . 12,900Y. Min, Capital. . . . . . . . . . 18,000Y. Min, Withdrawals . . . . . . . . . . . $ 3,370Engineering fees earned. . . . . . . 36,000Rent expense. . . . . . . . . . . . . . . . 7,540 Required 1. Prepare a trial balance for this business as of the end of May. 2. The following seven transactions produced the account balances shown above. a. Y. Min invested $18,000 cash in the business. b. Paid $7,540 cash for monthly rent expense for May. c. Paid $4,600 cash in advance for the annual insurance premium beginning the next period. d.…
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