Question

Transaction Analysis and Trial Balance Ashley Somers owns San Diego Art Company, a firm providing designs for advertisers, market analysts, and others. On July 1, the account balances: Cash $10,700 Accounts Payable $2,600 Accounts Receivable 10,000 Notes Payable 5.200 Common Stock 10.900 Retained Earnings 2,000 Total Assets $20,700 Total Liabilities and Stockholders' Equity $20,700 The following transactions occurred during the month of July: July 1 Paid July rent, 5870. 2 Collected 58,300 on account from customers 3 Paid $2,700 installment due on the $5,200 noninterest-bearing note payable. 4 Billed customers for design services rendered on account. $19,750 5 Rendered design services and collected from cash customers, 51,400 6 Paid $1,900 to creditors on account. 7 Collected $14,950 on account from customers. 8 Paid a delivery service for delivery of graphics to commercial firms, 5600 9 Paid july salaries, $4,800. 10 Received invoice for July advertising expense, to be paid in August $800. 11 Paid utilities for July, $550. 12 The business paid a $2,200 cash dividend. 13 Received invoice for supplies used in July, to be paid in August $2.460. 14 Purchased computer for $4.500 cash to be used in business starting next month.

Answer 1

General Entries

Ref.	Description	Debit	Credit
(1)	Rent Expenses	870
	Cash		870
	To Record Payment of rent Expenses
(2)	Cash	8,300
	Account Receivable		8,300
	To Record Collection from Debtors
(3)	Installment Notes Payable	2.700
	Cash		2,700
	To Record Payment of Notes Payable
(4)	Customers A/c	19,750
	To Service Fees rendered		19,750
	To Record Customer Billings
(5)	Cash	1,400
	To Service Fees rendered		1,400
	To Record Service Fees Rendered and collected.
(6)	Creditors	1,900
	To Cash		1,900
	To Record Payment to Creditors
(7)	Cash	14,950
	To Customers		14,950
	To Record collection from customers
(8)	Delivery Expenses	600
	To Cash		600
	To Record Payment of Delivery Expenses
(9)	Salaries	4,800
	To Cash		4,800
	To Record payment of Salaries
(10)	Advertising Expenses	800
	To Accounts Payable		800
	To Record advertising expense to be paid in following month
(11)	Utilities Expenses	550
	To Cash		550
	To Record payment of utilities expenses
(12)	Dividend	2,200
	To Cash		2,200
	To Record Payment of Dividend
(13)	Supplies Expenses	2,460
	To Accounts Payable		2,460
	To Record supplies expenses for the month
(14)	Computer	4,500
	To Cash		4,500
	To Record purchase of computer

Cash
Beg Balance	10,700
Rent Expenses		870
Accounts Receivable	8,300
Installment Notes Payable		2,700
Sales	1,400
Creditors		1,900
Customers	14,950
Delivery Expenses		600
Salaries		4,800
Utilities Expenses		550
Dividend		2,200
Computer		4,500
Balance	35,350	18,120	17,230

Accounts Receivable
Beg Balance	10,000
Cash		8,300
Sales	19,750
Cash		14,950
Balance	29,750	23,250	6,500

Equipment
Cash	4,500
Balance	4,500		4,500

Notes Payable
Beg Balance		5,200
Cash	2,700
Balance	2,700	5,200	2,500

Accounts Payable
Beg Balance		2,600
Cash	1,900
Supplies Expenses		2,460
Advertising Expenses		800
Balance	1,900	5,860	3,960

Common Stock
Beg Balance		10,900
Balance		10,900	10,900

Retained Earnings
Beg Balance		2,000
Balance			2,000

Dividends
Cash	2,000
Balance			2,000

Service Fees Earned
Customers		19,750
Cash		1,400
Balance		21,150	21,150

Rent Expenses
Cash	870
Balance	870		870

Salaries Expenses
Cash	4,800
Balance	4,800	4,800

Delivery Expenses
Cash	600
Balance	600		600

Advertising Expenses
Accounts Payable	800
Balance	800		800

Utilities Expenses
Cash	550
Balance	550		550

Supplies Expenses
Accounts Payable	2,460
Balance	2,460		2,460

Sun Diago Art Company Trial Balance July 31
	Debit	Credit
Cash	17,230
Accounts Receivable	6,500
Equipment	4,500
Accounts Payable		3960
Notes Payable		2,500
Common Stock		10,900
Retained Earnings		2,000
Dividends	2,000
Service Fees Earned		21150
Rent Expenses	870
Salaries Expenses	4,800
Delivery Expenses	600
Advertising Expenses	800
Supplies Expenses	2,460
Utilities Expenses	550
Total	$40,310	$40,510