1 answer

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month,...

Question:

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business:

June 1 Kris transferred cash from a personal bank account to an account to be used for the business, $35,000.
1 Paid rent for period of June 1 to end of month, $4,750.
6 Purchased office equipment on account, $14,100.
8 Purchased a van for $28,500 paying $4,500 cash and giving a note payable for the remainder.
10 Purchased supplies for cash, $2,380.
12 Received cash for job completed, $12,200.
15 Paid annual premiums on property and casualty insurance, $3,600.
23 Recorded jobs completed on account and sent invoices to customers, $11,900.
24 Received an invoice for van expenses, to be paid in June, $1,500.

Enter the following transactions on Page 2 of the two-column journal:

June 29 Paid utilities expense, $3,100.
29 Paid miscellaneous expenses, $950.
30 Received cash from customers on account, $7,330.
30 Paid wages of employees, $5,070.
30 Paid creditor a portion of the amount owed for equipment purchased on June 6, $6,825.
30 Withdrew cash for personal use, $1,600.
Required:
1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the post reference numbers until you have posted the entry to the general ledger in part 2.)
2. Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in both the journal and the ledger as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.
3. Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 2019.
4. Determine the excess of revenues over expenses for June.
5. Can you think of any reason why the amount determined in (4) might not be the net income for June?

Chart of Accounts CHART OF ACCOUNTS Eco-Centric Designs General Ledger ASSETS REVENUE 41 Fees Earned 11 Cash 12 Accounts Rece

1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the post reference numbers until you have posted the entry to the general ledger in part 2.)

JOURNAL Score: 171/257 ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. CREDIT ASSETS LIABILITIES EQUITY DEBIT 35,000.00 Cash

PAGE 2 JOURNAL Score: 0/163 ACCOUNTING EQUATION DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

UNADJUSTED TRIAL BALANCE

ACCOUNT TITLE DEBIT CREDIT

1

Cash

2

Accounts Receivable

3

Supplies

4

Prepaid Insurance

5

Office Equipment

6

Van

7

Notes Payable

8

Accounts Payable

9

Kris Storey, Capital

10

Kris Storey, Drawing

11

Fees Earned

12

Wages Expense

13

Rent Expense

14

Utilities Expense

15

Van expense

16

Miscellaneous Expense

17

Totals

Final Questions

4. Determine the excess of revenues over expenses for June Points: 0/1 5. Can you think of any reason why the amount determin

Chart of Accounts CHART OF ACCOUNTS Eco-Centric Designs General Ledger ASSETS REVENUE 41 Fees Earned 11 Cash 12 Accounts Receivable EXPENSES 13 Supplies 14 Prepaid Insurance 16 Office Equipment 18 Van 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Van expense 59 Miscellaneous Expense LIABILITIES 21 Notes Payable 22 Accounts Payable EQUITY 31 Kris Storey. Capital 32 Kris Storey. Drawing
JOURNAL Score: 171/257 ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. CREDIT ASSETS LIABILITIES EQUITY DEBIT 35,000.00 Cash Storey K, Capital 35,000.00 Rent Expense 4,750.00 Cash 4,750.00 6 Equipment 14,100.00 Accounts Payable 14,100.00 Van 28,500.00 Cash 4,500.00 24,000.00 Notes Payable 10 Supplies 2,380.00 Cash 2,380.00 12 Cash 12,200.00 Fees Earned 12,200.00 15 3,600.00 Prepaid Insurance Cash
PAGE 2 JOURNAL Score: 0/163 ACCOUNTING EQUATION DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
4. Determine the excess of revenues over expenses for June Points: 0/1 5. Can you think of any reason why the amount determined in (4) might not be the net income for June? Check all that apply Utilities expense includes expenses incurred for the month of June than have not yet been paid. Some supplies may have been used during June but no supplies expense has been recorded. Additions to capital has been wrongly recorded as drawings. Fees earned includes some fees earned in the month of June that have not been received Points: 0/1

Answers

Post ref Debit Credit Eco-Centric Designs Journal entries Date Account Page 1 1-Jun Cash Capital GL1 $ 35,000 GLI $ 35,000 1-Eco-Centric Designs T Accounts Date Item Credit Balance Debit Credit Balance Debit Credit Date Item Credit Post Ref Debit CasEco-Centric Designs Account Names Cash Accounts Receivable Prepaid Insurance Supplies Office Equipment Vehicle Accounts Payab

.

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