Chapter 2, Problem 7GLP

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 the month of September

S.no	Account title and Explanation	PR	Debit	Credit
a.	Cash	101	$60,000
	Office equipment	163	$25,000
	HV 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 for cash and note payable
c.	Office supplies	108	$2,000
	Accounts payable	250		$2,000
	Record purchase of office supplies on credit
d.	Automobile	164	$16,500
	HV Capital	301		$16,500
	Record transferring of automobile to the business
e.	Office equipment	163	$5,600
	Accounts payable	250		$5,600
	Record purchase of office equipment on credit
f.	Salary expense	601	$1,800
	Cash	101		$1,800
	Record payment of salaries
g.	Cash	101	$8,000
	Fees earned	402		$6,000
	Record earnings of fees
h.	Utility expense	602	$635
	Cash	101		$635
	Record payment of utility expenses
i.	Accounts payable	201	$2,000
	Cash	101		$2,000
	Record payment of cash to settle accounts payable
j.	Office equipment	163	$20,300
	Cash	101		$20,300
	Record purchase of office equipment on cash
k.	Accounts receivable	106	$6,250
	Fees earned	402		$6,250
	Record earning of revenue
l.	Salariesexpense	601	$1,800
	Cash	101		$1,800
	Record payment of wages to assistant
m.	Cash	101	$4,000
	Accounts receivable	106		$4,000
	Record receipt of payment
n.	HV Withdrawals	302	$2,800
	Cash	101		$2,800
	Record withdrawals 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

Answer to Problem 7GLP

Cash $22,945

Accounts receivable $29,000

Accounts payable $1,333

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.				$30,000	$30,000
f.		Salary expense		$1,800	$28,200
g.		Fees earned	$8,000		$36,200
h.		Utility expenses		$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 Capital		$2,800	$12,665

Accounts receivable            Account no 106

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

Office supplies            Account no 108

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

HV 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

Salaries 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 7GLP

Trial balance total $291,350.

Explanation of Solution

Trial balance

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