Question

JOURNAL ENTRIES AND T-ACCOUNT ILLUSTRATION PROBLEM Jim Wooldridge decides to start a new business, Wooly Consulting, a firm specializing in placing out of work coaches with jobs, giving coaching seminars and public speaking engagements. During the month of June 20XX he completed the following transactions: Required: Step 1: Prepare general journal entries to record the transactions in the provided general journal, Read the preparation tips that appear after the transactions on the next page NOWI Step 2: Post the entry amounts to the T-accounts represented in the general ledger as you go, Step 3: Prepare a trial balance for Wooly Consulting as of June 30, 20XX June 1 June 1 June 1 Jim began his business by transferring equipment valued at $4,200 into the business. He also placed $8,000 cash in a business checking account. He applied for and received a new credit card for the business. Jim purchased a car, costing $20,000 by paying $4,000 cash and signed a note for the balance with Biggs auto dealership. The note provides for a 10% APR interest cost. Jim purchased a new computer for $900 and supplies for $200, all on open account; payment terms 1/10, 1/30 Jim filled bought gasoline for the car, $55. He put the purchase on the new credit card. Jim's first customer Larry Brown, prepays Jim to do a job search for him. Larry gives Jim $3,000 cash in advance. Jim receives $500 cash for a speaking engagement on the Triangle offence scheme. Jim hires a former player of his, "Hoops" Wilson as an assistant to work with him, to be paid $10 an hour. June 2 June 3 June 5 June 7

Answer 1

General Journal

Date	Account	Debit $	Credit $
June 1	Assets A/c	4200
	To Equipment A/c		4200
	equipment transferred into new business
June 1	Bank A/c	8,000
	To Cash A/c		8,000
	cash deposited into the bank
June 1	Car A/c	20,000
	To Cash A/c		4,000
	To Bills Payable A/c		16,000
	car purchased on cash as well as on the credit
June 1	Computer A/c	900
	Supplies A/c	200
	To Bills Payable		1100
	Computer and supplies purchased on credit
June 2	Gasoline A/c	55
	To Credit Card A/c		55
	filled the gasoline of car on credit
June 3	Cash A/c	3,000
	To Income received in advance		3,000
	payment received in advance
June 5	Cash A/c	500
	To Triangle offense scheme		500
	received payment for speaking services
June 8	Travel & Food Expenses A/c	445
	To Credit Card A/c		445
	paid for travel and food trough credit card
June 9	Advertisement A/c	220
	To Bills Payable A/c		220
	bill is due for advertisement
June 10	Office Supplies A/c	140
	To Cash A/c		140
	purchased office supplies by paying cash
June 12	Prepaid Insurance A/c	2400
	To Cash A/c		2400
	Purchased insurance policy for the whole year
June 13	Income Received in advance	3000
	To Cash A/c		3000
	services provided for the cash which was received in advance
June 13	Consultant A/c	2,000
	To Cash A/c		2,000
	payment made to the consultant for the services
June 14	Assistant A/c	400
	To Cash A/c		400
	Payment made to the assistant for 40 hours @ $10
June 21	Bills Payable A/c	640
	To Cash		640
	payment made to bills receivable
June 21	Assistant A/c	400
	To Cash A/c		400
	payment made to the assistant for 40 hours @ $10 each hour
June 22	Utility Bills A/c	280
	To Bills Payable A/c		280
	the utility bill is due
June 23	Cash A/c	1000
	To Bills Receivable A/c		1000
	payment received from the previous debtors
June 25	Bills Payable A/c	900
	To Cash A/c		900
	Payment made to creditors for the computer
June 28	Assistant A/c	400
	To Cash A/c		400
	Payment made to the assistant for 40 hours @ $10 each hour
June 29	Advertisement A/c	400
	To Bank A/c		400

June 30	Bills Payable A/c	100
	To Cash A/c		100
	Payment made to the office supplies
June 30	Drawings A/c	300
	To Bank A/c		300
	drew from the bank for playing golf game
June 30	Telephone Bill A/c	220
	To Cash A/c		220
	payment made for the telephone bill
June 30	Credit Card Payment A/c	500
	To Cash A/c		500
	payment made for the credit card bill
June 30	Bills Payable A/c Interest Payable A/c	220 2
	To Cash A/c		222
	Payment made for advertisement

Asset A/c

1. Cash A/c

Particulars	Amount $	Particulars	Amount $
To Income Received in advanced	3000	By Bank A/c	8000
To Triangle Offense Scheme	500	By Car	4000
To Accounts Receivable or Bills Receivable	1000	By Office Supplies	140
To Balance C/d	18720	By Prepaid	2400
		By Income Received in advanced	3000
		By Consultant	2000
		By Assistant	1200
		By Accounts Payable or Bills Payable	1760
		By Interest A/c	2
		By Telephone Bill	220
		By Credit Card Bill	500
	23220		23220

2.Accounts Receivable A/c

Particulars	Amount $	Particulars	Amount $
To Cash A/c	1000	By Services	1000
Total	1000	Total	1000

3. Supplies A/c

Particulars	Amount $	Particulars	Amount $
To Bills Payable A/c	200
To Cash A/c	140	By Balance c/d	340
Total	340	Total	340

4. Prepaid Insurance

Particulars	Amount $	Particulars	Amount $
To Cash A/c	2400	By Balance C/d	2400
Total	2400	Total	2400

5.Computer & Equipment

Particulars	Amount $	Particulars	Amount $
To Assets A/c	4200
To Accounts Payable or Bills Payable A/c	900	By Balance C/d	5100
Total	5100	Total	5100

6. Car

Particulars	Amount $	Particulars	Amount $
To Cash A/c	4000
To Accounts Payable A/c	16000	By Balance C/d	20,000
Total	20,000	Total	20,000

Liabilities A/c

1.Accounts Payable A/c

Particulars	Amount $	Particulars	Amount $
To Cash A/c	1760	By Computer A/c	900
		By Supplies	200
		By Advertisement	220
		By Balance C/d	440
Total	1760	Total	1760

2. Credit Card Payable

Particulars	Amount $	Particulars	Amount $
To Cash A/c	500	By Gasoline A/c	55
		By Travelling & Food A/c	445
Total	500	Total	500

Withdrawals A/c

Particulars	Amount $	Particulars	Amount $
To Balance C/d	300	By Bank A/c	300
Total	300	Total	300

Traveling expenses A/c

Particulars	Amount $	Particulars	Amount $
To Balance C/d	445	By Credit Card A/c	445
Total	445	Total	445