6. Entry and trial balance preparation. Lee Adkins is a portrait artist. The following schedule represents Lee's combined chart of accounts and trial balance as of May 31.
Account number Account name Debit Credit
110 Cash $ 2,700
120 Accounts Receivable 12,100
130 Equipment and Supplies 2,800
140 Studio 45,000
210 Accounts Payable $2,600
310 Lee Adkins, Capital 57,400
320 Lee Adkins, Drawing 30,000
410 Professional Fee Revenue 39,000
510 Advertising Expense 2,300
520 Salaries Expense 2,100
540 Utilities Expense 2,000
$99,000 $99,000
The general ledger also revealed account no. 530, Legal and Accounting Expense. The following transactions occurred during June:
6/2: Collected $7,500 on account from customers.
6/7: Sold 25% of the equipment and supplies to a young artist for $700 for cash.
6/10: Received a $500 invoice from the accountant for preparing last quarter's financial statements.
6/15: Paid $2,100 to creditors on account.
6/27: Adkins withdrew $1,000 cash for personal use.
6/30: Billed a customer $3,000 for a portrait painted this month.
a. Record the necessary journal entries for June on page 2 of the company's general journal (See Exhibit 2.6).
b. Open running balance ledger "T" accounts by entering account titles, account num¬bers, and May 31 balances (See exhibit 2.3 and 2.4).
c. Post the journal entries to the "T" accounts.
d. Prepare a trial balance as of June 30 (See exhibit 2.9).
7. Journal entry preparation. On January 1 of the current year, Peter Houston invested $100,000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $70,000 and a $30,000 notes payable. Shortly thereafter, the company ac¬quired selected assets of a bankrupt competitor. The acquisition included land ($15,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $20,000 (an account payable) by February 15.
During January, the company had additional cash outlays for the follow¬ing items:
Purchases of store equipment $4,600
Note payment 500
Salaries expense 2,300
Advertising expense 700
The January utility bill of $200 was received on January 31 and will be paid next month. MuniServ rendered services to clients on account amounting to $9,400. All customers have been billed; by month end, $3,700 had been received in settlement of account balances.
Instructions
a. Present journal entries that reflect MuniServ's January transactions, including the $100,000 raised from the owner investment and loan (See exhibit 2.6).
b. Compute the total debits, total credits, and ending balance that would be found in the company's Cash account (Post to "T" Accounts, see exhibit 2.3 and 2.4).
c. Prepare a trail balance as of January 31 (See exhibit 2.9).
Account number Account name Debit Credit
110 Cash $ 2,700
120 Accounts Receivable 12,100
130 Equipment and Supplies 2,800
140 Studio 45,000
210 Accounts Payable $2,600
310 Lee Adkins, Capital 57,400
320 Lee Adkins, Drawing 30,000
410 Professional Fee Revenue 39,000
510 Advertising Expense 2,300
520 Salaries Expense 2,100
540 Utilities Expense 2,000
$99,000 $99,000
The general ledger also revealed account no. 530, Legal and Accounting Expense. The following transactions occurred during June:
6/2: Collected $7,500 on account from customers.
6/7: Sold 25% of the equipment and supplies to a young artist for $700 for cash.
6/10: Received a $500 invoice from the accountant for preparing last quarter's financial statements.
6/15: Paid $2,100 to creditors on account.
6/27: Adkins withdrew $1,000 cash for personal use.
6/30: Billed a customer $3,000 for a portrait painted this month.
a. Record the necessary journal entries for June on page 2 of the company's general journal (See Exhibit 2.6).
b. Open running balance ledger "T" accounts by entering account titles, account num¬bers, and May 31 balances (See exhibit 2.3 and 2.4).
c. Post the journal entries to the "T" accounts.
d. Prepare a trial balance as of June 30 (See exhibit 2.9).
7. Journal entry preparation. On January 1 of the current year, Peter Houston invested $100,000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $70,000 and a $30,000 notes payable. Shortly thereafter, the company ac¬quired selected assets of a bankrupt competitor. The acquisition included land ($15,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $20,000 (an account payable) by February 15.
During January, the company had additional cash outlays for the follow¬ing items:
Purchases of store equipment $4,600
Note payment 500
Salaries expense 2,300
Advertising expense 700
The January utility bill of $200 was received on January 31 and will be paid next month. MuniServ rendered services to clients on account amounting to $9,400. All customers have been billed; by month end, $3,700 had been received in settlement of account balances.
Instructions
a. Present journal entries that reflect MuniServ's January transactions, including the $100,000 raised from the owner investment and loan (See exhibit 2.6).
b. Compute the total debits, total credits, and ending balance that would be found in the company's Cash account (Post to "T" Accounts, see exhibit 2.3 and 2.4).
c. Prepare a trail balance as of January 31 (See exhibit 2.9).
