Question

RSSON HiTech Communications example from textbook, Chapters 2 & 3 ano! Based on the problem information below. 1. Write the journal entries based on the transaction analysis and the rules for debits and credits) 2. Post to the T-accounts 3. Create the trial balance Problem Information HiTech Communications Inc. is a newly formed corporation that operates an advertising agency that specializes in promoting computer-related products in the Cincinnati area. The following are transactions that occurred during its first month of operations, March 2013 1. On March 1, HITech sold 1,000 shares of common stock to several investors for cash of $12,000. 2. On March 2, HiTech raised additional funds by borrowing $3,000 from First Third Bank of Cincinnati. HiTech promised to pay the amount borrowed plus 8% interest to First Third Bank in 1 year. 3. On March 3, HiTech purchased office equipment (such as computer equipment) from MicroCenter Inc. for $4,500 in cash. 4. On March 4, HiTech purchased a 6-month insurance policy for $1,200 cash. 5. On March 6, HITech purchased office supplies from Hamilton Office Supply for $6,500. Hamilton Office Supply agreed to accept full payment in 30 days. 6. On March 10, HiTech sold advertising services to Miami Valley Products in exchange for $8,800 in cash. 7. On March 15, HITEch sold advertising services to the Cincinnati Enquirer for $3,300. HiTech agreed to accept full payment in 30 days. 8. On March 19, HiTech received $9,000 from the OA News for advertising services to be completed in the next 3 months. 9. On March 23, HiTech pays $6,000 cash for the supplies previously purchased form Hamilton Office Supply on credit (Transaction 5). 10. On march 25, HiTech collected $3,000 cash from the Cincinnati Enquirer for services sold earlier on credit (Transaction 7). 11. On March 26 (a Friday), HiTech paid weekly employee salaries of $1,800. 12. On March 30, HiTech paid its utility bill of $5,200 for March 13. On March 31, HiTech declared and paid a cash dividend of $500 to its stockholders The transactions are analyzed in the textbook on pages 68-72, with a summary on page 73 in Exhibit 2.6. The associated journal entries are shown on pages 81-83. The posting process is shown in Exhibit 2.11, the T-account view of the general ledger is shown in Exhibit 2.12, and the trial balance is shown in Cornerstone 2.6. The Review Problem at the end of Chapter 2 is similar. You can use it for additional practice analyzing transactions, preparing journal entries, posting to the ledger, and preparing a trial balance.

Answer 1

ANS 1 JOURNAL Debit Credit Man1 12,000 12,000 cash common Stock Cash Bank Loan man 2 3,000 3,000 man}. Compare Office equipment 4,500 4,500 cash учас ч. Insurance 11200 Cash 1,200 man 6. 6,500 6.500 Office Supplies ACCOUNTS Payable Cash Advertising senvices man 10, 8,800 8,800 maa 15. 3,300 Accounts Receivable Advertising Services 3,300 man 19. 9,000 man 23. cash 9,000 unearned advertising Services Accounts payable 16,000 cash Cash 3.000 ACCOUNTS Receivable 6,000 man 25 3,000 1,800 mae 26. Salary cash 11,800

Caedt Debit 5, 200 Mar 30. Utility bill cash 3,200 500 1. Maabl. Divpleng cash 500 2. POSTING IN'T' ACCOUNTS CASH 1,800 mant To common 12,000 man 3-BYOFFICE EQU Pment 4,500 Stock many. By insunance 1,200 mand To Bank loan 3,000 man 23. By Accounts 6.000 manio. TO Acivertising 8,800 payable services man 26 By Sanny mar 19 TO uneanned a man 20 By Utility 5,200 dovertising Services 13:01 manal By Dividend 3,000 soo mar 25 To Accounts Receivabile man31, By Balance cd 16,600 38,000! COMMON STOCK man 31. TO Balance cld 12.000 12,000/ mant. By cash 38,000 12,000 12,000! 15 ANK LOAN 3,000 mana. By cash 3,000 man31. TO Balance cld 3,000 3,000

OFFICE EQUIPMENT mans. To cash 4,500 mar 31 By Balance c/o 4,500 4,500 4,500 INSURANCE Exp 1,200 mar 31 By Balance cld 1,200 manu To cash 1200 7200 OFFICE SUPPLIES 6.500 man3. By Balance c/o 8.500 manc. To Accounts Payable 6500 ACCOUNTS PAVABLE 6,000 manc. By Office Supplies 6500 6,500 mana3. To cash mar 31, 2 To Ba Ance up soo 6500 ADVERTISING SERVICES 12, 100 manio. By cash manis. Accounts Receivable man 3! To balance od 8,800 3,300 12,100 12,100 ACCOUNTS RECEIVABLE 3,300 manas By cash 3,000 man 31, By Balance od 300 man 15. TO Advertising services 3,300 2300

9,000 UNEAR NED ADVERTISING SERVICES man 31.9013alanuecia 9,000 mar 19. By cash gooo 900 SALARY 1,800 man31 By Balance old 1800 mands. To cash Balance eld 7800 1800 UTILITY IBILL 5,200 man31, By Balance cfd 5200 man30. TO Cash 3200 3200 DIVIDEND 500 /man31 By 13 Ralance /d man31 To cash 300 5०० CREDIT 12000 3000 4500 1200 500 TP TRIAL BALANCE PARTICULAR D£1311 CASH 16,600 COMMON STOCK BANK LOAN OFFICE EQUIPMENT INSURANCE EXPENSE OFFICE SUPPLIÊS 6 500 ACCOUNTS PAYABLE ADVERTISING SERVICE ACCOUNTS RECEIVABLE UNEARNED ADVERTISING SÉRTICE SALARY UTILITY BILL DIVIDEND TOTALS 500 12100 300 9,000 1800 5200 500 136,600 36.600