Journal Entries and Trial Balance
On October 1, 20Y6, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:
|Oct.||1.||Jay transferred cash from a personal bank account to an account to be used for the business, $27,600.|
|4.||Paid rent for period of October 4 to end of month, $2,680.|
|10.||Purchased a used truck for $23,000, paying $2,000 cash and giving a note payable for the remainder.|
|13.||Purchased equipment on account, $10,760.|
|14.||Purchased supplies for cash, $1,850.|
|15.||Paid annual premiums on property and casualty insurance, $4,140.|
|15.||Received cash for job completed, $11,590.|
Enter the following transactions on Page 2 of the two-column journal:
Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 20Y6. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example.
|Pioneer Designs Unadjusted Trial Balance October 31, 20Y6|
|Debit Balances||Credit Balances|
3. The trial balance is prepared from the ending balances of the ledger accounts. Be careful to put the debit balances in the Debit column and the credit balances in the Credit column. Remember the trial balance column totals should be equal.
4. Determine the excess of revenues over expenses for October.
5. Can you think of any reason why the amount determined in (4) might not be the net income for October?
|21.||Paid creditor a portion of the amount owed for equipment purchased on October 13, $3,840.|
|24.||Recorded jobs completed on account and sent invoices to customers, $13,190.|
|26.||Received an invoice for truck expenses, to be paid in November, $1,210.|
|27.||Paid utilities expense, $1,380.|
|27.||Paid miscellaneous expenses, $500.|
|29.||Received cash from customers on account, $5,520.|
|30.||Paid wages of employees, $3,670.|
|31.||Withdrew cash for personal use, $3,060.|