Chapter 2, Problem 4PSA

1

To determine

Introduction: A journal is used to record financial transactions.It shows the debits and credits of each transaction.The process of recording transactions is called journalizing.After journalizing, the transactions are posted into ledgers.

The journal entries for given transactions.

Explanation of Solution

1. Journal entries to record the transactions in September

S.no	Account title and Explanation	PR	Debit	Credit
a	Cash	101	$60,000
	Office equipment	163	$25,000
	H.V Capital	301		$85,000
	Owners investment in business
b	Land	172	$40,000
	Building	170	$160,000
	Cash	101		$30,000
	Notes payable	250		$170,000
	Record purchase of land and building for cash and note payable
c.	Office supplies	108	$2,000
	Accounts payable	201		$2,000
	Purchase office supplies on credit
d.	Automobiles	164	$16,500
	HV Capital	301		$16,500
	Record transfer of automobile to business
e.	Office equipment	163	$5,600
	Accounts payable	201		$5,600
	Record purchase of office equipment on credit
f.	Salary expense	601	$1,800
	Cash	101		$1,800
	Paid cash towards the salary expense
g.	Cash	101	$8,000
	Fee earned	402		$8,000
	Received cash on service provided
h.	Utility Expense	602	$635
	Cash	101		$635
	Record cash payment for utility expenses
i.	Accounts payable	201	$2,000
	Cash	101		$2,000
	Record payment of cash to settle payable
j.	Office equipment	163	$20,300
	Cash	101		$20,300
	Record purchase of office equipment for cash
k.	Accounts receivable	106	$6,250
	Fees earned	402		$6,250
	Record of fees earned on service provided
l.	Salary expense	601	$1,800
	Cash	101		$1,800
	Record payment of salary to assistant
m.	Cash	101	$4,000
	Accounts receivable	106		$4,000
	Received cash on partial settlement of receivables
n.	HV withdrawals	302	$2,800
	Cash	101		$2,800
	Record withdrawal of cash by owner for personal use

2

To determine

Introduction: A journal is used to record financial transactions. It shows the debits and credits of each transaction. The process of recording transactions is called journalizing. After journalizing, the transactions are posted into ledgers.

The given ledger accounts.

Explanation of Solution

Posting of journal entries in ledgers

Cash           Account no 101

Date	PR	Account title	Debit	Credit	Balance
a.		HV Capital	$60,000		$60,000
b.		Building		$30,000	$30,000
f.		Salary expense		$1,800	$28,200
g.		Fees earned	$8,000		$36,200
h.		Utility expense		$635	$35,565
i.		Accounts payable		$2,000	$33,565
j.		Office equipment		$20,300	$13,265
l.		Salary expense		$1,800	$11,465
m.		Accounts receivable	$4,000		$15,465
n.		HV withdrawals		$2,800	$12,665

Accounts receivable           Account no 106

Date	PR	Account title	Debit	Credit	Balance
k.		Fee earned	$6,250		$6,250
m.		Cash		$4,000	$2,250

Office supplies           Account no 124

Date	PR	Account title	Debit	Credit	Balance
c.		Accounts payable	$2,000		$2,000

Automobiles           Account no 164

Date	PR	Account title	Debit	Credit	Balance
d.		HV Capital	$16,500		$16,500

Building           Account no 170

Date	PR	Account title	Debit	Credit	Balance
b.			$160,000		$160,000

Land           Account no 172

Date	PR	Account title	Debit	Credit	Balance
b.			$40,000		$40,000

Office equipment           Account no 163

Date	PR	Account title	Debit	Credit	Balance
a.		HV Capital	$25,000		$25,000
e.		Accounts payable	$5,600		$30,600
j.		Cash	$20,300		$50,900

Accounts Payable           Account no 201

Date	PR	Account title	Debit	Credit	Balance
c.		Office supplies		$2,000	$2,000
e.		Office equipment		$5,600	$7,600
i.		Cash	$2,000		$5,600

Notes payable           Account no 250

Date	PR	Account title	Debit	Credit	Balance
b.				$170,000	$170,000

HV Capital           Account no 301

Date	PR	Account title	Debit	Credit	Balance
a.		Cash		$60,000	$60,000
		Office equipment		$25,000	$85,000
d.		Automobiles		$16,500	$101,500

A.N Withdrawals           Account no 302

Date	PR	Account title	Debit	Credit	Balance
n		Cash	$2,800		$2,800

Fees earned           Account no 402

Date	PR	Account title	Debit	Credit	Balance
g.		Cash		$8,000	$8,000
k.		Accounts receivable		$6,250	$14,250

Salary expense           Account no 601

Date	PR	Account title	Debit	Credit	Balance
f.		Cash	$1,800		$1,800
l.		Cash	$1,800		$3,600

Utility expenses           Account no 602

Date	PR	Account title	Debit	Credit	Balance
h.		Cash	$635		$635

3

To determine

Introduction: A journal is used to record financial transactions. It shows the debits and credits of each transaction. The process of recording transactions is called journalizing. After journalizing, the transactions are posted into ledgers.

The trial balance from given information.

Answer to Problem 4PSA

Trial balance total is $291,350.

Explanation of Solution

HV Consulting

Trial balance

For the month ended September

Account title	Debit	Credit
Cash	$12,665
Accounts receivable	$2,250
Office equipment	$50,900
Office supplies	$2,000
Building	$160,000
Automobiles	$16,500
Land	$40,000
Accounts payable		$5,600
Note payable		$170,000
HV Capital		$101,500
HV Withdrawals	$2,800
Fees earned		$14,250
Salary expense	$3,600
Utility expenses	$635
Total	$291,350	$291,350