Chapter 2, Problem 3BPSB

To determine

Concept Introduction:

Journal entry:

In double entry system of accounting, journalizing is the recording of the given accounting transactions by giving effects to debits and credits.

Ledger accounts: Ledger accounts are the refinement of journal entries by presenting them in an understandable form that helps in finding out the balance of an account at a given point in time.

Trial balance: Trial balance is the first step in the preparation of final accounts and for ensuring that the arithmetical accuracy of the books of accounts prepared.

To write:

The general journal entries, ledger accounts and the trial balance

Explanation of Solution

The journal entries are passed; ledger accounts and trial balance is prepared.

The debit-credit rules for recording the journal entries are as under −

1. Debit what comes in, credit what goes out.
2. Debit the receiver, credit the giver.
3. Debit the expenses and assets, credit the incomes and liabilities.
1. The journal entries in the books of Zucker Management Services are passed as under-

S. No	Particulars	Account No	Debit ($)	Credit ($)
01-Nov	Cash account	101	30,000
	Office equipment account	163	15,000
	M. Zucker, capital account	301		45,000
02-Nov	Prepaid rent account	131	4,500
	Cash account	101		4,500
04-Nov	Office equipment account	163	2,500
	Office supplies account	124	600
	Accounts payable account	201		3,100
08-Nov	Cash account	101	3,400
	Services revenue account	403		3,400
12-Nov	Accounts receivable account	106	10,200
	Services revenue account	403		10,200
13-Nov	Accounts payable account	164	3,100
	Cash account	101		3,100
19-Nov	Prepaid insurance account	128	1,800
	Cash account	101		1,800
22-Nov	Cash account	101	5,200
	Accounts receivable account	106		5,200
24-Nov	Accounts receivable account	106	1,750
	Services revenue account	403		1,750
28-Nov	M. Zucker, withdrawals account	302	5,300
	Cash account	101		5,300
29-Nov	Office supplies account	124	249
	Accounts payable account	164		249
30-Nov	Utilities expense account	690	831
	Cash account	101		831

2. Ledger accounts in the books of Zucker Management Services are passed as under-

Cash account
Date	Particulars	Debit ($)	Credit ($)	Account #101 Balance (Dr)
	Opening balance	---
01-Nov	M. Zucker, capital account	30,000		30,000
02-Nov	Prepaid rent account		4,500	25,500
08-Nov	Services revenue account	3,400		28,900
13-Nov	Accounts payable account		3,100	25,800
19-Nov	Prepaid insurance account		1,800	24,000
22-Nov	Accounts receivable account	5,200		29,200
28-Nov	M. Zucker, withdrawals account		5,300	23,900
30-Nov	Utilities expense account		831	23,069

Accounts receivable account
Date	Particulars	Debit ($)	Credit ($)	Account #106 Balance (Dr)
	Opening balance	---
12-Nov	Services revenue account	10,200		10,200
22-Nov	Cash account		5,200	5,000
24-Nov	Services revenue account	1,750		6,750

Office supplies account
Date	Particulars	Debit ($)	Credit ($)	Account #124 Balance (Dr)
	Opening balance	---
04-Nov	Accounts payable account	600		600
29-Nov	Accounts payable account	249		849

Prepaid insurance account
Date	Particulars	Debit ($)	Credit ($)	Account #128 Balance (Dr)
	Opening balance	---
19-Nov	Cash account	1,800		1,800

Prepaid rent account
Date	Particulars	Debit ($)	Credit ($)	Account #131 Balance (Dr)
	Opening balance	---
02-Nov	Cash account	4,500		4,500

Office equipment account
Date	Particulars	Debit ($)	Credit ($)	Account #163 Balance (Dr)
	Opening balance	---
01-Nov	M. Zucker capital account	15,000		15,000
04-Nov	Accounts payable account	2,500		17,500

Accounts payable account
Date	Particulars	Debit ($)	Credit ($)	Account #201 Balance (Cr)
	Opening balance	---
04-Nov	Office equipment account		2,500	2,500
04-Nov	Office supplies account		600	3,100
13-Nov	Cash account	3,100		0
29-Nov	Office supplies account		249	249

M.Zucker, capital account
Date	Particulars	Debit ($)	Credit ($)	Account #301 Balance (Cr)
	Opening balance	---
01-Nov	Cash account		30,000	30,000
01-Nov	Office equipment account		15,000	45,000

M. Zucker, withdrawals account
Date	Particulars	Debit ($)	Credit ($)	Account #302Balance (Dr)
	Opening balance	---
28-Nov	Cash account	5,300		5,300

Services revenue account
Date	Particulars	Debit ($)	Credit ($)	Account #403 Balance (Cr)
	Opening balance	---
08-Nov	Cash account		3,400	3,400
12-Nov	Accounts receivable account		10,200	13,600
24-Nov	Accounts receivable account		1,750	15,350

Utilities expense account
Date	Particulars	Debit ($)	Credit ($)	Account #690 Balance (Dr)
	Opening balance	---
30-Nov	Cash account	831		831

3. Trial balance of Zucker Management Services as on November, 30

S.No	Ledger No	Ledger Name	Debit ($)	Credit ($)
1	101	Cash	23,069
2	106	Accounts receivable	6,750
3	124	Office supplies	849
4	128	Prepaid insurance	1,800
5	131	Prepaid rent	4,500
6	163	Office equipment	17,500
7	201	Accounts payable		249
8	301	M.Zucker, capital		45,000
9	302	M.Zucker, withdrawals	5,300
10	403	Services revenue		15,350
11	690	Utilities expense	831
TOTAL	60,599	60,599

The journal entries are thus passed and the ledger accounts and trial balance are thus prepared.