Question

Denzel Brooks opened a Web consulting business called Venture Consultants and completes the following transactions in March March 1 Brooks invested $175,000 cash along with $26,000 n office equipment in the company in exchange for common stock. 2 The company prepaid $6,000 cash for six months rent for an office. (Hint: Debit Prepaid Rent for $6,000.) 3 The company made credit purchases of office equipment for $3,800 and office supplies for $2,200. Payment is due within 10 days. 6 The company completed services for a client and immediately received $4,500 cash 9 The company completed a $10,900 project for a client, who must pay within 30 days. 12 The company paid $6,e00 cash to settle the account payable created on March 3 19 The company paid $6,400 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $6,400.) 22 The company received $4,000 cash as partial payment for the work completed on March 9 25 The company completed work for another client for $5,330 on credit 29 The company paid $5,400 cash in dividends 30 The company purchased $1,700 of additional office supplies on credit. 31 The company paid $1,400 cash for this month's utility bill.

Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (403); and Utilities Expense (690). 2. Post the journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of April 30.

Answer 1

Answer:

1. Prepare general journal entries to record these transactions using the following titles:

March 1

Dr Cash (101) 175,000

Dr Office Equipment (163) 26,000

    Cr Common Stock (307) 201,000

March 2

Dr Prepaid Rent (131) 6,000

    Cr Cash (101) 6,000

March 3

Dr Office Equipment (163) 3,800

Dr Office Supplies (124) 2,200

    Cr Accounts Payable (201) 6,000

March 6

Dr Cash (101) 4,500

    Cr Services Revenue (403) 4,500

March 9

Dr Accounts Receivable (106) 10,900

    Cr Services Revenue (403) 10,900

March 12

Dr Accounts Payable (201) 6,000

    Cr Cash (101) 6,000

March 19

Dr Prepaid Insurance (128) 6,400

    Cr Cash (101) 6,400

March 22

Dr Cash (101) 4,000

    Cr Accounts Receivable (106) 4,000

March 25

Dr Accounts Receivable (106) 5,330

    Cr Services Revenue (403) 5,330

March 29

Dr Dividends (319) 5,400

    Cr Cash (101) 5,400

March 30

Dr Office Supplies (124) 1,700

    Cr Accounts Payable (201) 1,700

March 31

Dr Utilities Expense (690) 1,400

    Cr Cash (101) 1,400

2. Post the journal entries from part 1 to the ledger accounts.

Account      Description                                  Debit         Credit

101               Cash                                           175,000

                                                                                           6,000

                                                                          4,500

                                                                                           6,000

                                                                                           6,400

                                                                          4,000

                                                                                           5,400

                                                                                            1,400  

101               Cash                                           158,300

106              Accounts Receivable                 10,900        

                                                                                           4,000

                                                                         5,330                    

106              Accounts Receivable                 12,330

124              Office Supplies                            2,200

                                                                         1,700                        

124              Office Supplies                            3,900

128              Prepaid Insurance                       6,400

131               Prepaid Rent                                 6,000

163              Office Equipment                        26,000

                                                                           3,800                      

163              Office Equipment                        29,800

201              Accounts Payable                                              6,000

                                                                           6,000

                                                                                                1,700    

201              Accounts Payable                                               1,700

307             Common Stock                                               201,000

319              Dividends                                       5,400

403             Services Revenue                                              4,500

                                                                                              10,900

                                                                                                5,330    

403             Services Revenue                                             20,730

690             Utilities Expense                            1,400

3. Prepare a trial balance as of April 30.

Account      Description                                  Debit         Credit

101               Cash                                           158,300

106              Accounts Receivable                  10,900        

106              Accounts Receivable                  12,330

124              Office Supplies                             3,900

128              Prepaid Insurance                        6,400

131               Prepaid Rent                                 6,000

163              Office Equipment                        29,800

201              Accounts Payable                                               1,700

307             Common Stock                                               201,000

319              Dividends                                       5,400

                   Retained earnings                                             11,000

403             Services Revenue                                             20,730

690             Utilities Expense                            1,400

                                                                                                                               

TOTAL                                                           234,430       234,430