Chapter 2, Problem 8GLP

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
Oct, 1	Cash	101	$45,000
	Computer equipment	167	$20,000
	Office equipment	163	$8,000
	Common stock	307		$73,000
	Record investments for common stock
2	Prepaid rent	131	$3,300
	Cash	101		$3,300
	Record payment of cash for prepaid rent
3	Computer supplies	126	$1,420
	Accounts payable	201		$1,420
	Record purchase of computer supplies on credit
5	Prepaid insurance	128	$2,220
	Cash	101		$2,220
	Record payment of cash for insurance
6	Accounts receivable	106	$4,800
	Computer service revenue	403		$4,800
	Record earnings of revenue for service provided
8	Accounts payable	201	$1,420
	Cash	101		$1,800
	Record payment of cash for accounts payable
10	No entry required
12	Accounts receivable	106	$1,400
	Computer service revenue	403		$1,400
	Record revenue on service performed
15	Cash	101	$4,800
	Accounts receivable	106		$4,800
	Record receipt of cash on receivable
17	Repair expense- computer	684	$805
	Cash	101		$805
	Record payment of cash for repairs
20	Advertising expense	655	$1,728
	Cash	101		$1,728
	Record payment of cash for advertisement expense
22	Cash	101	$1,400
	Accounts receivable	106		$1,400
	Record receipt of cash on receivable
28	Accounts receivable	106	$5,208
	Computer service revenue	403		$5,208
	Record revenue on service performed
31	Wages expense	623	$875
	Cash	101		$875
31	Dividends	319	$3,600
	Cash	101		$3,600
	Record payment of cash dividends
Nov, 1	Mileage expense	676	$320
	Cash	101		$320
	Record reimbursement of mileage expense
2	Cash	101	$4,633
	Computer service revenue	403		$4,633
	Record receipt of cash on account of service performed
5	Computer supplies	126	$1,125
	Cash	101		$1,125
	Record payment of cash on purchase of computer supplies
8	Accounts receivable	106	$5,668
	Computers service revenue	403		$5,668
	Record revenue earned
13	No entry required
18	Cash	101	$2,208
	Accounts receivable	106		$2,208
	Record receipt of cash on accounts receivable
22	Miscellaneous expenses	677	$250
	Cash	101		$250
	Record payment of cash for miscellaneous expenses
24	Accounts receivable	106	3,950
	Computer service revenue	403		$3,950
	Record revenue earned
25	No entry required
28	Mileage expense	676	$384
	Cash	101		$384
	Record payment of cash for mileage expense
30	Wages expense	623	$1,750
	Cash	101		$1,750
	Record payment of cash for wages
30	Dividends	319	$2,000
	Cash	101		$2,000
	Record payment of cash dividends

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 8GLP

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
Oct, 1		Common stock	$45,000		$45,000
2		Prepaid rent		$3,300	$41,700
5		Prepaid insurance		$2,220	$39,480
8		Computer supplies		$1,420	$38,060
15		Accounts receivable	$4,800		$42,860
17		Repair expense-computer		$805	$42,55
20		Advertisements expense		$1,728	$40,327
22		Accounts receivable	$1,400		$41,727
31		Wages expense		$875	$40,852
Nov, 1		Mileage expense		$320	$36,932
2		Computer service revenue	$4,633		$41,565
5		Office supplies		$1,125	$40,440
18		Accounts receivable	$2,208		$42,648
22		Miscellaneous expense		$250	$42,398
28		Mileage expense		$384	$42,014
30		Wages expense		$1,750	$40,264
30		Dividends		$2,000	$38,264

Accounts receivable            Account no 106

Date	PR	Account title	Debit	Credit	Balance
Oct, 6		Computer service revenue	$4,800		$4,800
12		Computer service revenue	$1,400		$6,200
15		Cash		$4,800	$1,400
22		Cash		$1,400	0
28		Computer service revenue	$5,208		$5,208
Nov 8		Computer service revenue	$5,228		$10,876
18		Cash		$2,208	$8,668
24		Computer service revenue	$3,950		$12,618

Office supplies            Account no 126

Date	PR	Account title	Debit	Credit	Balance
Oct 3		Accounts payable	$1,420		$1,420
Nov 5		Cash	$1,125		$2,545

Prepaid insurance            Account no 128

Date	PR	Account title	Debit	Credit	Balance
Oct 5		Cash	$2,220		$2,220

Prepaid rent            Account no 131

Date	PR	Account title	Debit	Credit	Balance
Oct 2		Cash	$3,300		$3,300

Office equipment            Account no 163

Date	PR	Account title	Debit	Credit	Balance
Oct 1		Common stock	$8,000		$8,000

Computer equipment            Account no 167

Date	PR	Account title	Debit	Credit	Balance
Oct 1		Common stock	$20,000		$20,000

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
Oct 3		Computer supplies		$1,420	$1,420
8		Cash	$1,420		0

DividendsAccount no 319

Date	PR	Account title	Debit	Credit	Balance
Oct 31		Cash	$3,600		$3,600
Nov 30		Cash	$2,000		$5,600

Common stock            Account no 307

Date	PR	Account title	Debit	Credit	Balance
Oct 1				$73,000	$73,000

Computer service revenue            Account no 403

Date	PR	Account title	Debit	Credit	Balance
Oct 6		Accounts receivable		$4,800	$4,800
12		Accounts receivable		$1,400	$6,200
28		Accounts receivable		$5,208	$11,408
Nov 2		Cash		$4,633	$16,041
8		Accounts receivable		$5,668	$21,709
24		Accounts receivable		$3,950	$25,659

Wages expense            Account no 623

Date	PR	Account title	Debit	Credit	Balance
Oct 31		Cash	$875		$875
Nov 30		Cash	$1,750		$2,625

Advertising expense            Account no 655

Date	PR	Account title	Debit	Credit	Balance
Oct 20		Cash	$1,728		$1,728

Mileage expenses            Account no 676

Date	PR	Account title	Debit	Credit	Balance
Nov 1		Cash	$320		$320
28		Cash	$384		$704

Miscellaneous expense            Account no 677

Date	PR	Account title	Debit	Credit	Balance
Nov 22		Cash	$250		$1,728

Repairs expense-computer            Account no 684

Date	PR	Account title	Debit	Credit	Balance
Oct 17		Cash	$805		$805

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 8GLP

Trial balance total $98,659.

Explanation of Solution

Trial balance

Account title	Debit	Credit
Cash	$38,264
Accounts receivable	$12,618
Computer supplies	$2,545
Prepaid insurance	$2,220
Prepaid rent	$3,300
Office equipment	$8,000
Computer equipment	$20,000
Accounts payable		0
Common stock		$73,000
Dividends	$5,600
Computer service revenue		$25,659
Wages	$2,625
Advertising expenses	$1,728
Miscellaneous expense	$250
Repairs expense- computer	$805
Mileage expense	$704
Total	$98,659	$98,659