Question

Question text

Transaction Analysis and Trial Balance

Pam Brown owns Art Graphics, a firm providing designs for advertisers and market analysts. On July 1, the business’s general ledger showed the following normal account balances:

Cash	$8,800	Accounts Payable	$2,400
Accounts Receivable	10,100	Notes Payable	5,300
		Common Stock	1,700
		Retained Earnings	9,500
Total Assets	$18,900	Total Liabilities and Stockholders' Equity	$18,900

The following transactions occurred during the month of July:

July	1	Paid July rent, $970.
	2	Collected $7,400 on account from customers.
	3	Paid $2,800 installment due on the $5,300 noninterest-bearing note payable.
	4	Billed customers for design services rendered on account, $16,850.
	5	Rendered design services and collected from cash customers, $1,500.
	6	Paid $1,700 to creditors on account.
	7	Collected $13,050 on account from customers.
	8	Paid a delivery service for delivery of graphics to commercial firms, $700.
	9	Paid July salaries, $4,900.
	10	Received invoice for July advertising expense, to be paid in August, $900.
	11	Paid utilities for July, $650.
	12	Paid stockholders a dividend of $2,300 cash.
	13	Received invoice for supplies used in July, to be paid in August, $2,560.
	14	Purchased computer for $4,600 cash to be used in business starting next month.

Required:

a. Set up accounts for the general ledger with July 1 balances and enter the beginning balances. Also provide the following accounts: Equipment; Service Fees Earned; Rent Expense; Salaries Expense; Delivery Expense; Advertising Expense; Utilities Expense; Supplies Expense; and Dividends. Prepare journal entries and record the listed transactions in the appropriate T-accounts.

Please show all steps

b. Prepare a trial balance as of July 31.

Answer 1

Date July In the books of Pan Brown owns and a . Graphics JOURNAL Oo, - Particulers i Amairt | Amoud Rent Ale 970 1970 1. To, Cash Ale (Being rent paid by cash Cash Ale 7400 TO Accounts Receivable Ale 7400 [(Being cash collect from customers Notes payble Ale Dr. 2800 To, cash Ale 2800 (Being installment paid for). Notes puble. & Accounts recevable Ale-Dr 16850 To, service render Ale 146850 (Being service render to customerigl con credit) cash Ale 1500 TO, Accounts Receivable isoo (Being cash collect from customers | Accounts paybule Ale Dr. Il | 1700 I. TO, Cash ale (Being paid to creditors) 11700 as cash Ak 13050 13050 To customers ale (Being cash collects from customer) Delivery Expenses Ale TO Cash Ale (Being Delivery Expenses by cash) Dr. 700 1700 paid

Amount 900 2307 DY Date partieulers E Amount salaries Ale - Dr. I 4900 4900 TO, Cash Ale (paid salaries a dos by eash) Advertising Fox penses Ale —DY. 900 To, outsanding Advertising fx | (Being Advertising Expensed outsanding) 11 utility Expenses Ale Dr. 650 TO Cash Ale (Being utility Expenses paid by cash) 12 | Dividend Ale TO Cash Ale Q300 (Being dividend paid by eash) Supplies Ale DY. TO, shoutsonding supplies TO, Accounts Dagble 14 computer Ale 4600 . TO, Cash Ale 4600 Bo (Being computer purchases for office use) Rule for younal posting to Ledger Rule for yourginal entries Posting into ledger Account Suppose we take one sownal entry's a Rent Ale Dr, gto i To, cash Ale " In Rent Account's Debit side we write" To cash - Account and credit side of eash Account we write "By, Rent Ale". 13 2560 SO

970. Ale ledger Cash Account I Date particulers I Amount patel particulers Il Amount Su To balance bla 18800 1 By, Rent Alc 210, Account precikle 7400 3 By, Nodes payblen 2800 Reteible 1500 16 By Accounts pays 17.00 # 10, Account Receille 13050 8 By, Delivery | Expenses Ale.. 700 9 By, salaries Alc . 4900 | By, utility Ex. Ale 650 | By, Dividend Ale 12300 14 By, Computer Ale 14600 31 By, balance eld 112130 30750 Auga to balance bla 112130 Dr. (customers) Account Receivable Account 30750 . gey TO', balance bld 1 10 100 2 By, cash Ale 4 TO, service Rende168505 BY, Cash Ale Ale 7 By, Cash Be 31 BY, balance eld 7400 1500 13050 5000 126 950 126950 1° To, balance bld 9000 tecounts pay bile Account Full for balat 6 To, Cash Ab 31 | To, balance eld Sul By, balance bla. By, common stock 2400 2560 1700 3260 4960 Ang By, balance bld 4960" 3260 emi Notes pay bue Hecount 13 To, Cash Ale 12800 Jul By balance old To, eash Alo 11700 31 fio, balance eld 2500 5300 5300 Ang B4, balance bla 5300 2500

columon stock Account Jel To, Accounts payble 2560 h By, balance bld" 1700 860 1 /31/By, balance of 9560 2560 Ana To, balance bila 860 Retained faning Account Jan By, bal old 9500 32 T0, balance eld. || 9500 9500 3500 - 10, batanee blo9500 By, balance bld 9500 Rent Account sul To eash AL 1970 Jul BI By, balance eld ] 970 970 970 E 1 To, balance bla 1970 a Service Render Account 31 To balance eld 16 850 Gul By, Accounds 16850 Recejable e 16850 12°/B4, balance bild Delivery Expenses Account 168.50 16850 Jull To, cash Alc || 900 By, balanceeld 700 700 700 = 1 To, balance bld I 1700

July To, cash Ale salaries Account (14900 1901 BABY, balance el 14900 14900 4900 1.19 00, balance bila 114900 || . Advertisement Expenses VID 70, outsanding Adv. Expenses as 1900 By, balance el 900- goo 900 11 on To, balance ble 900 outsanding Advertisement Expenses en BY, Adv. Expenses All 900 31/To, balance ela 1900 900 11900 1mm B4, balance bl 1900 utility Expenses ||650 Jual Toy, balance eld 650 SEG say to, cash Ale 1 650 OS To, balance bld 650 Dividend Account er Tu to eash Al 1 2300 Jul By, balance eh 2300 2300 2307 Aug To balance bild

Dec Date particulous Jedno, Cash Ale computer Account amount inter particwars Jul By, balance ca no I Amount 114600 4600 sull | 14600 Dingho, balance bla 14600 || 4600 Trial Balance as on July 31 Debuit Balance Amount credit Balance Amount Cash 12130 Accounts payble 3260 - Accounts Receivable 5000 Nodes pay ble 2500 - common stock 860 Retained farning 9500 970 servise Render | 16850 Delivery Expenses 700 outsanding Adv. Expenses 900 salaries Advertisement Expenses! 900 - utility Expenses 650 Dividend 2300 computer 4600 Rent 4900 33010 | 33010