Chapter 4, Problem 10SPB

1.

To determine

Set up general ledger accounts by entering the balances as of November 1.

Explanation of Solution

General ledger:

General ledger is a record of all accounts of assets, liabilities, and stockholders’ equity, necessary to prepare financial statements.

(Figure 1)

(Figure 2)

(Figure 3)

(Figure 4)

(Figure 5)

(Figure 6)

(Figure 7)

(Figure 8)

(Figure 9)

(Figure 10)

(Figure 11)

(Figure 12)

(Figure 13)

(Figure 14)

2.

To determine

Prepare journal entry to record the given transactions.

Explanation of Solution

Prepare journal entry to record the given transactions.

Date	Accounts title and explanation	Post. Ref.	Debit ($)	Credit ($)
November 1	Rent Expense	521	300
	Cash	101		300
	(To record the payment on  November )
November 2	Tailoring supplies	141	150
	Accounts payable	202		150
	(To record the purchase of tailoring supplies on account)
November 3	Tailoring Equipment	183	300
	Accounts payable	202		300
	(To record the  purchase machine on account)
November 5	Cash	101	100
	Accounts Receivable	122	300
	Tailoring fees	401		400
	(To record the amount earned on tailoring fees)
November 8	Advertising expense	512	13
	Cash	101		13
	(To record the payment made on the  newspaper ad)
November 9	Phone Expense	525	28
	Cash	101		28
	(To record the payment of phone bill)
November 10	Electricity Expense	533	21
	Cash	101		21
	(To record the payment of electricity bill)
November 11	Cash	101	200
	Accounts Receivable	122		200
	(To record the cash to be received on account)
November 12	Cash	101	200
	Accounts receivable	122	250
	Tailoring Fees	401		450
	(To  record the cash on tailoring fees)
November 15	Wages Expense	511	400
	Cash	101		400
	(To record the payment made  to the employee)
November 16	Accounts Payable	202	100
	Cash	101		100
	(To record the payment of cash on account)
November 17	Miscellaneous Expense	549	12
	Cash	101		12
	(To record the payment made for magazine subscription)
November 19	Cash	101	300
	Accounts receivable	122	150
	Tailoring Fees	401		450
	(To  record the cash on tailoring fees)
November 23	Cash	101	300
	Accounts Receivable	122		300
	(To record the amount of cash received on account)
November 24	Advertising expense	512	13
	Cash	101		13
	(To record the payment made on the  newspaper ad)
November 26	Miscellaneous Expense	549	12
	Cash	101		12
	(To record the payment made for magazine subscription)
November 27	Cash	101	200
	Accounts receivable	122	400
	Tailoring Fees	401		600
	(To  record the cash on tailoring fees)
November 30	Cash	101	400
	Accounts Receivable	122		400
	(To record the cash received on account)

(Table 1)

3.

To determine

Post the entries to the general ledger.

Explanation of Solution

Post the entries to the general ledger.

(Figure 18)

(Figure 19)

(Figure 20)

(Figure 21)

(Figure 22)

(Figure 23)

(Figure 24)

(Figure 25)

(Figure 26)

(Figure 27)

(Figure 28)

(Figure 29)

(Figure 30)

(Figure 31)

4.

To determine

Prepare a trial balance.

Explanation of Solution

Prepare a trial balance.

Company T
Trial balance
November 31, 20..
Accounts	Account No.	Debit ($)	Credit ($)
Cash	101	7,012
Accounts Receivable	122	684
Tailoring Supplies	141	1,150
Tailoring Equipment	183	4,100
Accounts Payable	202		4,475
Person A’s, Capital	311		6,130
Person A’s, Drawing	312	800
Tailoring Fees	401		5,500
Wages Expense	511	1,200
Advertising Expense	512	60
Rent Expense	521	900
Phone Expense	525	88
Electricity Expense	533	65
Miscellaneous Expense	549	46
Total		16,105	16,105

(Table 2)

Therefore, the total of the debit and credit column of the trial balance reported an amount of $16,105.