Scenario: For the past three years, Carol Dixon operated part-time as shipping agent and in 2022 she decided to move to a rented office and to operate the business on a full-time basis. She registered the business as CD Shipping Agent Ltd but has no accounting personal to prepare her financial information and has approached your group for assistance. The company’s financial year end is December 31 each year. They have provided the following information and transactions for 2022: Jan1. Balances from 2021 –Cash $280,000; Accounts Receivable $125,000; Supplies $105,000; Furniture and Equipment $440,000; Other Creditors $115,000; and Capital $835,000. Jan 2. The following assets were received from Carol Dixon in exchange for capital in the company: cash - $120,000, accounts receivable -$20,500, supplies - $25,050, and office equipment - $100,000. Feb1. Paid fifteen (15) months’ rent on a lease rental contract, $375,000. Mar 30. Paid the premiums on the property and peril insurance policies, $150,000. April 4. Received cash from clients as an advance payment for services to be provided in the coming months, $200,000. May 5. Purchased additional office equipment on account from DT Company, $60,000. June 6. Received cash from clients on account, $63,000. June 10. Paid cash for newspaper advertisement, $15,800. Aug 12. Paid DT Company a portion of the debt incurred on May 5, $45,000. Sept 12. Recorded services provided on account for the period July 1 – Sept 12, $104,000. Sept 30. Paid part-time workers salary, $60,000. Oct 17. Recorded cash from cash clients for fees earned during the first half of year, $233,000. Oct30. Paid cash for supplies, $11,000. Oct 30. Recorded services provided on account for the period June to July, $110,000. Nov 24. Recorded cash from cash clients for fees earned for the period September 13- Nov 24, $190,000. Nov 25. Received cash from clients on account, $22,000. Nov 27. Paid part-time workers for salary $180,000. Dec 29. Paid telephone bill for the year 2022 $60,000. Dec 30. Paid electricity bill for the year 2022 $190,000. Dec 30. Recorded cash from cash clients for fees earned for the period September 14- Dec 30, $190,000. Dec 30. Recorded services provided on account for October to December 2022, $63,000. Requirement: Prepare the opening journal entries and journalize each transaction in the general journal referring to the following chart of accounts in selecting the accounts to be debited and creditedand include a narration for each transaction: Account# Account Name 11 Cash 12 Accounts Recievables 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Furniture and equipment 21 Other Creditors 22 Salaries Payable 23 Unearned Fees 31 Capital Stock 41 Fees Earned 51 Salary Expense 52 Rent Expense 53 Supplies Expense 54 Insurance Expense 55 Utilities Expense 56 Advertising Expense 57 Income Summary 2. Post the journal enteries to their respective ledger accouts. 3. Prepare a trial balance based on the balances derived after completing requirement #2. 4. THe company presented the following adjustments and required you to preparing the adjusting enteries in the general journal. (narration required for each journal entry) i. insurance expired during 2022, $120,000. ii. Supplies on hand on December 31, 2022, $65,000. iii. unpaid salary on December 31, 2022, $140,000. iv. Rent not expired on December 31, 2022, $75,000 v. Unearned fees on December 31, 2022, $20,000 5. Posting the adjusting enteries to their respective ledger accounts already started in requirement #2.
Scenario:
For the past three years, Carol Dixon operated part-time as shipping agent and in 2022 she decided to move to a rented office and to operate the business on a full-time basis. She registered the business as CD Shipping Agent Ltd but has no accounting personal to prepare her financial information and has approached your group for assistance. The company’s financial year end is December 31 each year. They have provided the following information and transactions for 2022:
Jan1. Balances from 2021 –Cash $280,000;
Jan 2. The following assets were received from Carol Dixon in exchange for capital in the company: cash - $120,000, accounts receivable -$20,500, supplies - $25,050, and office equipment - $100,000.
Feb1. Paid fifteen (15) months’ rent on a lease rental contract, $375,000.
Mar 30. Paid the premiums on the property and peril insurance policies, $150,000.
April 4. Received cash from clients as an advance payment for services to be provided in the coming months, $200,000.
May 5. Purchased additional office equipment on account from DT Company, $60,000.
June 6. Received cash from clients on account, $63,000.
June 10. Paid cash for newspaper advertisement, $15,800.
Aug 12. Paid DT Company a portion of the debt incurred on May 5, $45,000.
Sept 12. Recorded services provided on account for the period July 1 – Sept 12, $104,000.
Sept 30. Paid part-time workers salary, $60,000.
Oct 17. Recorded cash from cash clients for fees earned during the first half of year, $233,000.
Oct30. Paid cash for supplies, $11,000.
Oct 30. Recorded services provided on account for the period June to July, $110,000.
Nov 24. Recorded cash from cash clients for fees earned for the period September 13- Nov 24, $190,000.
Nov 25. Received cash from clients on account, $22,000.
Nov 27. Paid part-time workers for salary $180,000.
Dec 29. Paid telephone bill for the year 2022 $60,000.
Dec 30. Paid electricity bill for the year 2022 $190,000.
Dec 30. Recorded cash from cash clients for fees earned for the period September 14- Dec 30, $190,000.
Dec 30. Recorded services provided on account for October to December 2022, $63,000.
Requirement:
- Prepare the opening journal entries and journalize each transaction in the general journal referring to the following chart of accounts in selecting the accounts to be debited and creditedand include a narration for each transaction:
Account# | Account Name |
11 | Cash |
12 | Accounts Recievables |
14 | Supplies |
15 | Prepaid Rent |
16 | Prepaid Insurance |
18 | Furniture and equipment |
21 | Other Creditors |
22 | Salaries Payable |
23 | Unearned Fees |
31 | Capital Stock |
41 | Fees Earned |
51 | Salary Expense |
52 | Rent Expense |
53 | Supplies Expense |
54 | Insurance Expense |
55 | Utilities Expense |
56 | Advertising Expense |
57 | Income Summary |
2. Post the journal enteries to their respective ledger accouts.
3. Prepare a
4. THe company presented the following adjustments and required you to preparing the adjusting enteries in the general journal. (narration required for each
i. insurance expired during 2022, $120,000.
ii. Supplies on hand on December 31, 2022, $65,000.
iii. unpaid salary on December 31, 2022, $140,000.
iv. Rent not expired on December 31, 2022, $75,000
v. Unearned fees on December 31, 2022, $20,000
5. Posting the adjusting enteries to their respective ledger accounts already started in requirement #2.
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