On January 1, 20Y5, Fahad Ali established Mountain Top Realty, which completed the following transactions during the month: Jan. 1 Fahad Ali transferred cash from a personal bank account to an account to be used for the business, $53,000. 2 Paid rent on office and equipment for the month, $7,950. 3 Purchased supplies on account, $4,240. 4 Paid creditor on account, $2,320. 5 Earned fees, receiving cash, $24,180. 6 Paid automobile expenses (including rental charge) for month, $2,490, and miscellaneous expenses, $560. 7 Paid office salaries, $6,630. 8 Determined that the cost of supplies used was $1,860. 9 Withdrew cash for personal use, $2,600. Required:
On January 1, 20Y5, Fahad Ali established Mountain Top Realty, which completed the following transactions during the month: Jan. 1 Fahad Ali transferred cash from a personal bank account to an account to be used for the business, $53,000. 2 Paid rent on office and equipment for the month, $7,950. 3 Purchased supplies on account, $4,240. 4 Paid creditor on account, $2,320. 5 Earned fees, receiving cash, $24,180. 6 Paid automobile expenses (including rental charge) for month, $2,490, and miscellaneous expenses, $560. 7 Paid office salaries, $6,630. 8 Determined that the cost of supplies used was $1,860. 9 Withdrew cash for personal use, $2,600. Required:
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter4: Accounting For Retail Operations
Section: Chapter Questions
Problem 4.18E: Multiple-step income statement On March 31, 20Y5, the balances of the accounts appearing in the...
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On January 1, 20Y5, Fahad Ali established Mountain Top Realty, which completed the following transactions during the month:
Jan. | 1 | Fahad Ali transferred cash from a personal bank account to an account to be used for the business, $53,000. |
2 | Paid rent on office and equipment for the month, $7,950. | |
3 | Purchased supplies on account, $4,240. | |
4 | Paid creditor on account, $2,320. | |
5 | Earned fees, receiving cash, $24,180. | |
6 | Paid automobile expenses (including rental charge) for month, $2,490, and miscellaneous expenses, $560. | |
7 | Paid office salaries, $6,630. | |
8 | Determined that the cost of supplies used was $1,860. | |
9 | Withdrew cash for personal use, $2,600. |
Required:
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Journalize entries for transactions Jan. 1 through 9. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. | ||||||
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3. | Prepare an unadjusted |
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4. | Determine the following:
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5. | Determine the increase or decrease in owner’s equity for January. |
CHART OF ACCOUNTSMountain Top RealtyGeneral Ledger
ASSETS | |
11 | Cash |
12 | Supplies |
LIABILITIES | |
21 | Accounts Payable |
EQUITY | |
31 | Fahad Ali, Capital |
32 | Fahad Ali, Drawing |
REVENUE | |
41 | Fees Earned |
EXPENSES | |
51 | Rent Expense |
52 | Office Salaries Expense |
53 | Automobile Expense |
54 | Supplies Expense |
55 | Miscellaneous Expense |
1. Journalize entries for transactions Jan. 1 through 9. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
PAGE 1
JOURNAL
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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2. Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank.
Cash | |||
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Bal. |
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Supplies | |||
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Bal. |
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Accounts Payable | |||
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Bal. |
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Fahad Ali, Capital | |||
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Fahad Ali, Drawing | |||
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Fees Earned | |||
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Rent Expense | |||
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Office Salaries Expense | |||
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Automobile Expense | |||
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Supplies Expense | |||
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Miscellaneous Expense | |||
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