Question

Transaction Entries, Posting, Trial Balance, and Adjusting Entries: Market-Tech, a market research firm, had the following transactions in June, its first month of operations.

4 expense for June is $320. P P3-2B. Transaction Entries, Posting, Trial Balance, and Adjusting Entries Market-Tech, a market search firm, had the following transactions in June, its first month of operations. I J. Witson invested $28,000 of personal funds in the firm in exchange for common stock. 2 The firm purchased the following from an office supply company: office equipment, $11,040; office supplies, $2.840. Terms called for a cash payment of $3,500, with the remainder due in 60 days. (Make a compound entry.) 3 Paid June rent, $1.275. 4 Contracted for five months' advertising in a local newspaper at $325 per month and paid for the advertising in advance. 5 Signed a six-month contract with an electronics firm to provide research consulting services at a rate of $3,200 per month. Received two months' fees in advance. Work on the contract started immediately. 6 Billed various customers for services rendered, $8,000. 7 Paid two weeks' salaries (five-day week) to employees, $3,600. 8 Paid J. Witson's travel expenses to business conference, $1,440. 9 Paid $520 cash for postage to mail questionnaire. 10 Paid two weeks' salaries to employees, $3,600. 11 Billed various customers for services rendered, $7,200. 12 Collected $7,900 from customers on account. 13 J. Witson received a $2.500 cash dividend. Required a. Set up a general ledger that includes the following accounts: Cash; Accounts Receivable; Onice Office Equip Supplies; Prepaid Advertising: Office Equipment; Accumulated Depreciation ment; Accounts Payable; Salaries Payable: Unearned Service Fees: Common Stock; DIVIDINIS Service Fees Earned; Salaries Expense; Advertising Expense; Supplies Expense; Rent Express Travel Expense; Depreciation Expense-Office Equipment; and Postage Expense. b. Record June transactions in general journal form and post to the ledger accounts. c. Prepare an unadjusted trial balance as of June 30. d. Record adjusting journal entries in general journal form, and post to the ledger accou lowing information is available on June 30: Office supplies on hand, $1,830. Accrued salaries, $875. Estimated life of office equipment, eight years. (Assume equipment was puren Also, make any necessary adjusting entries for advertising and for service fees indica transactions. Assume original transactions occurred June 1. P3-3B. Trial Balance and Adjusting Entring ager accounts. The fol- ent was purchased June 1) indicated by the June 3,4 All

Answer 1

Market-Tech Journal entries Date Account 1 Cash Credit Calculation Debit $ 28,000 Common Stock $ 28,000 2 $ $ 11,040 2,840 Office Equipment Office Supplies Cash Accounts Payable $ $ 3,500 10,380 3 $ 1,275 Rent expense Cash $ 1,275 4 $ 1,625 =325*5 Prepaid Advertising Cash $ 1,625 5 $ 6,400 =3,200*2 Cash Unearned Service Fees $ 6,400 6 $ 8,000 Accounts Receivable Service Fees Earned $ 8,000 7 $ 3,600 Salaries expense Cash $ 3,600 $ 1,440 Travel expense Cash $ 1,440 9 $ 520 Postage expense Cash $ 520 10 $ 3,600 Salaries expense Cash $ 3,600 11 $ 7,200 Accounts Receivable Service Fees Earned $ 7,200 12 $ 7,900 Cash Accounts Receivable $ 7,900 $ 2,500 $ 2,500 13 Dividends Cash Adjusting entries 14 Supplies expense Office Supplies $ 1,010 =2,840-1,830 $ 1,010 15 $ 875 Salaries expense Salaries Payable $ 875 16 $ 115 =11,040/8*1/12 Depreciation expense-Office Equipment Accumulated Depreciation Office Equipment $ 115 17 $ 325 Advertising expense Prepaid Advertising $ 325 18 $ 3,200 Unearned Service Fees Service Fees Earned $ 3,200

Credit Date Date Credit Date Market-Tech T Accounts Date Debit Date Cash 1 $ 28,000 2 5 $ 6,400 12 $ 7,900 Debit Date Credit Accounts Receivable $ 8,000 12 $ 7,900 $ 7,200 Debit Date Office Supplies $ 2,840 Debit Date Credit Prepaid Advertising $ 1,625 2 6 11 $ 3,500 $ 1,275 $ 1,625 $ 3,600 $ 1,440 $ 520 $ 3,600 $ 2,500 13 Unadj Bal. $ 24,240 Unadj Bal. $ 7,300 Unadj Bal. $ 2,840 Unadj Bal. $ 1,625 14 $ 1,010 17 $ 325 Bal. Bal. Bal. Bal. $ 24,240 Office Equip $ 11,040 $ 7,300 Accum. Depr. - Office Equip $ 1,830 Accounts Payable 2 $ 1,300 Salaries Payable 2 $ 10,380 Unadj Bal. $ 11,040 Unadj Bal. $ 10,380 Unadj Bal. $ 16 $ - 115 Unadj Bal. $ 15 $ 875 Bal. $ 115 $ 10,380 $ 875 $ 11,040 Unearned Service Fees 5 $ 6,400 Bal. Common Stock Bal. Dividends $ 2,500 $ 28,000 13 Unadj Bal. $ 6,400 Unadj Bal. $ 28,000 Unadj Bal. $ 2,500 18 $ 3,200 $ 3,200 $ 28,000 Bal. $ 2,500 Advertising expense Bal. Service Fees Earned 6 11 Bal. Salaries expense $ 3,600 $ 3,600 Supplies expense $ 8,000 $ 7,200 7 10 Unadj Bal. $ 15,200 Unadj Bal. $ 7,200 18 $ 3,200 15 $ 875 Unadj Bal. $ 17 $ . 325 Unadj Bal. $ - 14 $ 1,010 Bal. $ 18,400 Bal. Rent expense 1,275 $ 8,075 Travel expense $ 1,440 Bal. $ 325 Bal. Depreciation expense-Office Equipment 9 $ 1,010 Postage expense $ 520 3 $ 8 Unadj Bal. $ 1,275 Unadj Bal. $ 1,440 Unadj Bal. $ 520 Unadj Bal. $ 16 $ . 115 Bal. $ 1,275 Bal. $ 1,440 Bal. $ 115 Bal. $ 520

Unadjusted TB Debit Credit 24,240 7,300 2,840 1,625 11,040 10,380 Market-Tech Account Names Cash Accounts Receivable Office Supplies Prepaid Advertising Office Equipment Accumulated Depreciation Office Equipment Accounts Payable Salaries Payable Unearned Service Fees Common Stock Dividends Service Fees Earned Salaries expense Advertising expense Supplies expense Rent expense Travel expense Depreciation expense-Office Equipment Postage expense Totals 6,400 28,000 Adjusted TB Debit Credit 24,240 7,300 1,830 1,300 11,040 115 10,380 875 3,200 28,000 2,500 18,400 8,075 325 1,010 1,275 1,440 115 520 60,970 60,970 2,500 15,200 7,200 1,275 1,440 520 59,980 59,980