The transactions completed by PS Music during June 20Y9 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business’s operations: Jul. 1 Peyton Smith made an additional investment in PS Music by depositing $5,000 in PS Music’s checking account. 1 Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750. 1 Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2 Received $1,000 cash from customers on account. 3 On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months. 3 Paid $250 to creditors on account. 4 Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5 Purchased office equipment on account from Office Mart, $7,500. 8 Paid for a newspaper advertisement, $200. 11 Received $1,000 for serving as a disc jockey for a party. 13 Paid $700 to a local audio electronics store for rental of digital recording equipment. 14 Paid wages of $1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: Jul. 16 Received $2,000 for serving as a disc jockey for a wedding reception. 18 Purchased supplies on account, $850. 21 Paid $620 to Upload Music for use of its current music demos in making various music sets. 22 Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23 Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20Y9. 27 Paid electric bill, $915. 28 Paid wages of $1,200 to receptionist and part-time assistant. 29 Paid miscellaneous expenses, $540. 30 Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 20Y9. 31 Received $3,000 for serving as a disc jockey for a party. 31 Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July. 31 Withdrew $1,250 cash from PS Music for personal use. PS Music’s chart of accounts and the balance of accounts as of July 1, 20Y9 (all normal balances), are as follows: 11 Cash $3,920 12 Accounts Receivable 1,000 14 Supplies 170 15 Prepaid Insurance — 17 Office Equipment — 21 Accounts Payable 250 23 Unearned Revenue — 31 Peyton Smith, Capital 4,000 32 Peyton Smith, Drawing 500 41 Fees Earned 6,200 50 Wages Expense 400 51 Office Rent Expense 800 52 Equipment Rent Expense 675 53 Utilities Expense 300 54 Music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Required: 1. Use the data in Accounting Equation Grid panel (reproduced from Chapter 1 Continuing Problem) and enter the July 1, 20Y9, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and select a check mark (√) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. Record DATE, POST. REF., a debit or credit and a debit or credit under BALANCE on every line. In CNOW, Item descriptions are used for balances. Enter Balance for ITEM when recording beginning balances. Leave ITEM blank when recording all other entries. In CNOW, Journal pages do not begin with “J”. For example journal page 10 POST. REF. is simply 10. Use a ✓ for beginning balances. If the ending balance is $0, at least one balance amount should be $0. 4. Prepare an unadjusted trial balance as of July 31, 20Y9.

The transactions completed by PS Music during June 20Y9 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business’s operations: Jul. 1 Peyton Smith made an additional investment in PS Music by depositing $5,000 in PS Music’s checking account. 1 Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750. 1 Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2 Received $1,000 cash from customers on account. 3 On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months. 3 Paid $250 to creditors on account. 4 Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5 Purchased office equipment on account from Office Mart, $7,500. 8 Paid for a newspaper advertisement, $200. 11 Received $1,000 for serving as a disc jockey for a party. 13 Paid $700 to a local audio electronics store for rental of digital recording equipment. 14 Paid wages of $1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: Jul. 16 Received $2,000 for serving as a disc jockey for a wedding reception. 18 Purchased supplies on account, $850. 21 Paid $620 to Upload Music for use of its current music demos in making various music sets. 22 Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23 Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20Y9. 27 Paid electric bill, $915. 28 Paid wages of $1,200 to receptionist and part-time assistant. 29 Paid miscellaneous expenses, $540. 30 Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 20Y9. 31 Received $3,000 for serving as a disc jockey for a party. 31 Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July. 31 Withdrew $1,250 cash from PS Music for personal use. PS Music’s chart of accounts and the balance of accounts as of July 1, 20Y9 (all normal balances), are as follows: 11 Cash $3,920 12 Accounts Receivable 1,000 14 Supplies 170 15 Prepaid Insurance — 17 Office Equipment — 21 Accounts Payable 250 23 Unearned Revenue — 31 Peyton Smith, Capital 4,000 32 Peyton Smith, Drawing 500 41 Fees Earned 6,200 50 Wages Expense 400 51 Office Rent Expense 800 52 Equipment Rent Expense 675 53 Utilities Expense 300 54 Music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Required: 1. Use the data in Accounting Equation Grid panel (reproduced from Chapter 1 Continuing Problem) and enter the July 1, 20Y9, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and select a check mark (√) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. Record DATE, POST. REF., a debit or credit and a debit or credit under BALANCE on every line. In CNOW, Item descriptions are used for balances. Enter Balance for ITEM when recording beginning balances. Leave ITEM blank when recording all other entries. In CNOW, Journal pages do not begin with “J”. For example journal page 10 POST. REF. is simply 10. Use a ✓ for beginning balances. If the ending balance is $0, at least one balance amount should be $0. 4. Prepare an unadjusted trial balance as of July 31, 20Y9.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 5PA: Inner Resources Company started its business on April 1, 2019. The following transactions occurred...

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The transactions completed by PS Music during June 20Y9 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business’s operations:

Jul.	1	Peyton Smith made an additional investment in PS Music by depositing $5,000 in PS Music’s checking account.
	1	Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750.
	1	Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
	2	Received $1,000 cash from customers on account.
	3	On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months.
	3	Paid $250 to creditors on account.
	4	Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)
	5	Purchased office equipment on account from Office Mart, $7,500.
	8	Paid for a newspaper advertisement, $200.
	11	Received $1,000 for serving as a disc jockey for a party.
	13	Paid $700 to a local audio electronics store for rental of digital recording equipment.
	14	Paid wages of $1,200 to receptionist and part-time assistant.

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

Jul.	16	Received $2,000 for serving as a disc jockey for a wedding reception.
	18	Purchased supplies on account, $850.
	21	Paid $620 to Upload Music for use of its current music demos in making various music sets.
	22	Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.
	23	Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20Y9.
	27	Paid electric bill, $915.
	28	Paid wages of $1,200 to receptionist and part-time assistant.
	29	Paid miscellaneous expenses, $540.
	30	Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 20Y9.
	31	Received $3,000 for serving as a disc jockey for a party.
	31	Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July.
	31	Withdrew $1,250 cash from PS Music for personal use.

PS Music’s chart of accounts and the balance of accounts as of July 1, 20Y9 (all normal balances), are as follows:

11	Cash	$3,920
12	Accounts Receivable	1,000
14	Supplies	170
15	Prepaid Insurance	—
17	Office Equipment	—
21	Accounts Payable	250
23	Unearned Revenue	—
31	Peyton Smith, Capital	4,000
32	Peyton Smith, Drawing	500
41	Fees Earned	6,200
50	Wages Expense	400
51	Office Rent Expense	800
52	Equipment Rent Expense	675
53	Utilities Expense	300
54	Music Expense	1,590
55	Advertising Expense	500
56	Supplies Expense	180
59	Miscellaneous Expense	415

	Required:
1.	Use the data in Accounting Equation Grid panel (reproduced from Chapter 1 Continuing Problem) and enter the July 1, 20Y9, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and select a check mark (√) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.)
2.	Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
3.	Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. Record DATE, POST. REF., a debit or credit and a debit or credit under BALANCE on every line. In CNOW, Item descriptions are used for balances. Enter Balance for ITEM when recording beginning balances. Leave ITEM blank when recording all other entries. In CNOW, Journal pages do not begin with “J”. For example journal page 10 POST. REF. is simply 10. Use a ✓ for beginning balances. If the ending balance is $0, at least one balance amount should be $0.
4.	Prepare an unadjusted trial balance as of July 31, 20Y9.

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