Question

P2-3A

P2-3A Maquoketa Services was formed on May 1, 2017. The following transactions took place during the first month. Transactions on May 1: 1. Jay Bradford invested $40,000 cash in the company, as its sole owner. 2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,050 per month. 3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year. 4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was made immediately; the remainder will be paid in 6 months. 5. Paid $1,800 cash for a one-year insurance policy on the furniture and equipment Transactions during the remainder of the month: 6. Purchased basic office supplies for $420 cash. 7. Purchased more office supplies for $1,500 on account 8. Total revenues earned were $20,000-$8,000 cash and $12,000 on account. 9. Paid $400 to suppliers for accounts payable due. 10. Received $3,000 from customers in payment of accounts receivable. 11. Received utility bills in the amount of $380, to be paid next month. 12. Paid the monthly salaries of the two employees, totaling $6,100. Instructions (a) Prepare journal entries to record each of the events listed. (Omit explanations.) (b) Post the journal entries to T-accounts. (c) Prepare a trial balance as of May 31, 2017.

Answer 1

JOURNAL ENTRIES S.No - Notes/detail Invested cash in I ACCOUNT Cash ale I Capital Alc DEBITS EREDIT (8) 40000 40.000 Company 2. Hilled two employees NO ENTRY (as galary is not Грам иt) 3. signed a rental & advance paid o Prepaid Reut Al cash ale 24,000 24000 - 4. Purchaped furniture I requipment Furniture Equipmat AL 30,000 I Cash ale Vendor (ceditur at 1000 20.000 - 5 || Purchased Insurana 1,800 Prepaid Insurance Cash ale I foo 6.11 Purchased office I suppu ist 425 pbe ex peyto A4 Cash Ale 490 I 7.1 Punhasd wou office I Supplies a 1500 office expenses al toonat a 1.500 - Supplier at & Revenue eaumed CashAle Account Receivable Ah Revenue Al(sales) 8000 12000 20.000

o su Date : Page No. NO NOTES paid to office in supplier JOURNAL (CONTO) ACCOUNT Supplier ale Cash Ale DEBIT) CREDITO) 400 400 10. I Received from Accounts Receivable 3,000 Cash Ale Account Receivable 3.000 L 380 I utility Bills to be paid next month utility Billsal. Accred utility Billsa 380 12: Paid monthly 6.100 Salary ali ash ALL & alanist L 6500

I Date may 1. I - Cash ale a Details T & T Date I Details $ Capital Ah 40000 May d. Prepaid kent 40000 Revenu a 8000 Furniture - 24000 Accounts Equipment AL10000 receivabuA 3000 Prepaid Insuranu 1800 .- Office Expenses 420 400 salary Ab 6.100 May 31 Balance cla 1 8280 51000 (bar.gg 51,000 Supplier - r Capital ale Date Date Details I Details Cash Ale . I I 40000 May 40000 40002 Balance 62 40000 40200 6 Date - Details Cash Ale T Pelepaid Rent Ak a & s ak dak | Details May l.. 9400 May 31 Balance col 24000 2400o 24000 24000 June 1 Balance 6/d Date Details Cash Ale. Vendor Ale Furniture & Equipment al & Date Details 10 000 goooo - Balanucla 30000 30000 Baton 30000 30000 Balance 6/6

D Prepaid f Insurance ale Date Details Date Detail Cash Al I 1 goo May 31. Balanuela Ifoo I foo Balance 6/6 1,800 by Date 1 118 - Detail Cash ale I Supplier al office Expenses Alc s I patel Details 420 1500 Balonce chal 1920 1910 1920 1190 Batane od Doule Detail Isale ale Reren Accounts Receivable Ale . $ Date I Details Cash the 12000 - Balance ca 12000 ogooo T S 3000 9000 [12000 Balanu 6/1 H . Date details Cash ale May 31 Balance cla office supplier the $ date Details office supplies 1500 1100 expuisse) 1 500 Tonet Balance 6/0 1 100 I rendorf Finniture & equipment) date I petailor 20000 - Furniture requip. 20000 JINL Balance bol 20,000 TS Detool May 31. Bala nuca

Salary ale sake Date Detail I L Details - May 31 osh ah 6100 May? Balance da 6,500 16100 6100 Date utility Bills All (Expenses I gate Details Dedul Detail Accred utility Bit 380 May 31 Balance la 380 380 e Acceved utility Bill I & Date to Detail Date Octail T utility Bill Ah May 31. Balance de 380 380 380 Tine 1 | Balance bla y 2lo Revenue Ale Cash Al 3000 Accounts Receivat goooo yooo Balance do 12000 20,000