Concept explainers
Entries into T accounts and
Marjorie Knaus, an architect, organized Knaus Architects on January 1, 20Y4. During the month, Knaus Architects completed the following transactions:
a. Issued common stock to Marjorie Knaus in exchange for $30,000.
b. Paid January rent for office and workroom, $2,500.
c. Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder.
d. Purchased office and computer equipment on account, $8,000.
e. Paid cash for supplies, $2,100.
f. Paid cash for annual insurance policies, $3,600.
g. Received cash from client for plans delivered, $9,000.
h. Paid cash for miscellaneous expenses, $2,600.
i. Paid cash to creditors on account, $4,000.
j. Paid installment due on note payable, $1,875.
k. Received invoice for blueprint service, due in February, $5,500.
l. Recorded fees earned on plans delivered, payment to be received in February, $31,400.
m. Paid salary of assistants, $6,000.
n. Paid gas, oil, and repairs on automobile for January, $1,300.
Instructions
1. Record these transactions directly in the following T accounts, without journalizing: Cash,
2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
3. Prepare an unadjusted trial balance for Knaus Architects as of January 31, 20Y4.
4. Determine the net income or net loss for January.
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Chapter 2 Solutions
Financial And Managerial Accounting
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