Chapter 2, Problem 4PSB

1.

To determine

Introduction: A journal is used to record financial transactions. It shows 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 the month of June

S.no	Account title and Explanation	PR	Debit	Credit
a	Cash	101	$35,000
	Office equipment	163	$11,000
	A.N Capital	301		$46,000
	Owners investment in business
b	Land	172	$7,500
	Building	170	$40,000
	Cash	101		$15,000
	Notes payable	250		$32,500
	Record purchase of land and building for cash and note payable
c.	Office supplies	108	$500
	Accounts payable	201		$500
	Purchase office equipment and supplies on credit
d.	Automobiles	164	$8,000
	A.N Capital	301		$8,000
	Record transfer of automobile to business
e.	Office equipment	163	$1,200
	Accounts payable	201		$1,200
	Record purchase of office equipment on credit
f.	Salary expense	601	$1,000
	Cash	101		$1,000
	Paid cash towards salary expense
g.	Cash	101	$3,200
	Fee earned	402		$3,200
	Received cash on service provided
h.	Utility Expense	602	$540
	Cash	101		$540
	Record cash payment for utility expenses
i.	Accounts payable	201	$500
	Cash	101		$500
	Record payment of cash to settle payable
j.	Office equipment	163	$3,400
	Cash	101		$3,400
	Record purchase of office equipment for cash
k.	Accounts receivable	106	$4,200
	Fees earned	402		$4,200
	Record of fees earned on service provided
l.	Salary expense	601	$1,000
	Cash	101		$1,000
	Record payment of salary to assistant
m.	Cash	101	$2,200
	Accounts receivable	106		$2,200
	Received cash on partial settlement of receivables
n.	A.N withdrawals	302	$1,100
	Cash	101		$1,100
	Record withdrawal of cash by owner for personal use

2.

To determine

Introduction: A journal is used to record financial transactions. It shows 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

CashAccount no 101

Date	PR	Account title	Debit	Credit	Balance
a.		A.N Capital	$35,000		$35,000
b.		Building		$15,000	$20,000
f.		Salary expense		$1,000	$19,000
g.		Fees earned	$3,200		$22,200
h.		Utility expense		$540	$21,660
i.		Accounts payable		$500	$21,160
j.		Office equipment		$3,400	$17,760
l.		Salary expense		$1,000	$16,760
m.		Accounts receivable	$2,200		$18,960
n.		A.N withdrawals		$1,100	$17,860

Accounts receivableAccount no 106

Date	PR	Account title	Debit	Credit	Balance
k.		Service revenue	$4,200		$4,200
m.		Cash		$2,200	$2,000

Office suppliesAccount no 124

Date	PR	Account title	Debit	Credit	Balance
c.		Accounts payable	$500		$500

AutomobilesAccount no 164

Date	PR	Account title	Debit	Credit	Balance
d.		A.N Capital	$8,000		$8,000

BuildingAccount no 170

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

LandAccount no 172

Date	PR	Account title	Debit	Credit	Balance
b.			$7,500		$7,500

Office equipmentAccount no 163

Date	PR	Account title	Debit	Credit	Balance
a.		A.N Capital	$11,000		$11,000
e.		Accounts payable	$1,200		$12,200
j.		Cash	$3,400		$15,600

Accounts PayableAccount no 201

Date	PR	Account title	Debit	Credit	Balance
c.		Office supplies		$500	$500
e.		Office equipment		$1,200	$1,700
i.		Cash	$500		$1,200

Notes payableAccount no 250

Date	PR	Account title	Debit	Credit	Balance
b.				$32,500	$32,500

A.N CapitalAccount no 301

Date	PR	Account title	Debit	Credit	Balance
a.		Cash		$35,000	$35,000
		Office equipment		$11,000	$46,000
d.		Automobiles		$8,000	$54,000

A.N WithdrawalsAccount no 302

Date	PR	Account title	Debit	Credit	Balance
N		Cash	$1,100		$1,100

Fees earnedAccount no 402

Date	PR	Account title	Debit	Credit	Balance
g.		Cash		$3,200	$3,200
k.		Accounts receivable		$4,200	$7,400

Salary expenseAccount no 601

Date	PR	Account title	Debit	Credit	Balance
f.		Cash	$1,000		$1,000
l.		Cash	$1,000		$2,000

Utility expensesAccount no 602

Date	PR	Account title	Debit	Credit	Balance
h.		Cash	$540		$540

3.

To determine

Introduction: A journal is used to record financial transactions. It shows 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

Explanation of Solution

Trial balance

Account title	Debit	Credit
Cash	$17,860
Accounts receivable	$2,000
Office equipment	$15,600
Office supplies	$500
Building	$40,000
Automobiles	$8,000
Land	$7,500
Accounts payable		$1,200
Note payable		$32,500
M.Z Capital		$54,000
M.Z Withdrawals	$1,100
Fees earned		$7,400
Salary expense	$2,000
Utility expenses	$540
Total	$95,100	$95,100