Question

At the beginning of April, Ahmed Khan launched a custom computer solutions company called Softworks. The company had the following transactions during April. 1. Ahmed Khan invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company. 2. The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000. 3. The company purchased a portable building with $34,500 cash and moved it onto the land acquired in b. 4. The company paid $5,000 cash for the premium on a two-year insurance policy. 5. The company provided services to a client and immediately collected $4,600 cash 6. The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long-term note payable for $3,700. 7. The company completed $4,250 of services for a client. This amount is to be received within 30 days. 8. The company purchased $950 of additional office equipment on credit. 9. The company completed client services for $10,200 on credit. 10. The company received a bill for rent of a computer testing device that was used on a recently completed job. The $320 rent cost must be paid within 30 days. 11. The company collected $5,100 cash in partial payment from the client described in transaction i. 12. The company paid $1,800 cash for wages to an assistant. 13. The company paid $950 cash to settle the payable created in transaction h. 14. The company paid $608 cash for minor maintenance of the company's computer equipment 15. H. Kadir withdrew $6,230 cash from the company for personal use. 16. The company paid $1,800 cash for wages to an assistant. 17. The company paid $750 cash for advertisements on the web during April. Required 1. Prepare general journal entries to record these transactions (use account titles listed in part 2). 2. Make the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Computer Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); H. Kadir Capital (301); H. Kadir Withdrawals (302); Fees Earned (402); Wages Expense (601); Computer Rental Expense (602); Advertising Expense (603), and Repairs Expense (604). Post the journal entries from part 1 to the accounts and enter the balance after each posting. 3. Prepare a trial balance as of the end of April. (Hint: Trial balance totals, $141,080)

Answer 1

Softworks Journal Enteries Trans. Particulars 1 Cash Office Equipment Computer Equipment H.Kadir , Capital (Capital Invested) Debit in $ Credit in $ 65000 5750 30000 100750 Debit in $ Credit in $ 17262 9350 5000 6700 34500 2 22000 34500 22000 5000 Land Cash Note Payable (Land Purchased) Trial Balance For the period ending Apr 30 Acct. Particulars 101 Cash 106 Accounts Receivable 108 Prepaid Insurance 163 Office Equipment 164 Computer Equipment 170 Building 172 Land 201 Accounts Payable 250 Note Payable 301 H.Kadir , Capital 302 H.Kadir, Withdarwals 402 Fees Earned 601 Wages Expense 602 Rent Expense 603 Advertisement Expense 604 Repairs Expense Totals 17000 320 20700 100750 3 34500 34500 6230 Building Cash (Building Purchased) 34500 19050 3600 320 4 5000 750 Prepaid Insurance Cash ( 2 year insurance paid) 5000 608 140820 140820 260 5 4600 Cash Fees Earned (Fees earned) 4600 6 4500 Computer Equipment Cash Note Payable (Equipment purchased) 800 3700 7 4250 Accounts Receivable Fees Earned (Fees earned) 4250 8 950 Office Equipment Accounts Payable (Equipment purchased) 950 9 10200 Accounts Receivable Fees Earned (Fees earned) 10200 10 320 Rent Expense Accounts Payable (Expense accrued) 320 11 5100 Cash Accounts Receivable (Cash from debtorso 5100 12 1800 Wages Expense Cash (Wages paid) 1800 13 Accounts Payable 950 Cash 950 (Creditors paid) 14 608 Repairs Expense Cash (Expense paid) 608 15 6230 H.Kadir, Withdarwals Cash (Cash drawn for personal use) 6230 16 1800 Wages Expense Cash (Wages paid) 1800 17 750 Advertisement Expense Cash (Expense paid) 750

Cash Trans H.Kadir , Capital Trans Particulars 1 Acct - 301 Debit in $ Credit in $ Balance 100750 100750 1 2 3 4 H.Kadir, Withdarwals Trans Particulars 15 Cash Acct - 302 Debit in $ Credit in $ Balance 6230 6230 5 6 11 Particulars H.Kadir , Capital Land Building Prepaid Insurance Fees Earned Computer Equipment Accounts Receivable Wages Expense Accounts Payable Repairs Expense H.Kadir, Withdarwals Wages Expense Advertisement Expense Acct - 101 Debit in $ Credit in $ Balance 65000 65000 5000 60000 34500 25500 5000 20500 4600 25100 800 24300 5100 29400 1800 27600 950 26650 608 26042 6230 19812 1800 18012 750 17262 12 13 Fees Earned Trans Particulars 5 Cash 7 Accounts Receivable 9 9 Accounts Receivable Acct - 402 Debit in $ Credit in $ Balance 4600 4600 4250 8850 10200 19050 14 15 16 17 Wages Expense Trans Particulars 12 Cash 16 Cash Acct-601 Debit in $ Credit in $ Balance 1800 1800 1800 3600 Accounts Receivable Trans Particulars 7 Fees Earned 9 Fees Earned 11 Acct - 106 Debit in $ Credit in $ Balance 4250 4250 10200 14450 5100 9350 Rent Expense Trans Particulars 10 Accounts Payable Acct -602 Debit in $ Credit in $ Balance 320 320 Prepaid Insurance Trans Particulars 4 Cash Acct - 108 Debit in $ Credit in $ Balance 5000 5000 Advertisement Expense Trans Particulars 17 Cash Acct -603 Debit in $ Credit in $ Balance 750 750 Office Equipment Trans Particulars 1 H.Kadir , Capital 8 Accounts Payable Acct - 163 Debit in $ Credit in $ Balance 5750 5750 950 6700 Repairs Expense Trans Particulars 14 Cash Acct-604 Debit in $ Credit in $ Balance 608 608 Computer Equipment Trans Particulars 1 H.Kadir , Capital 6 Cash Note Payable Acct - 164 Debit in $ Credit in $ Balance 30000 30000 800 30800 3700 34500 Building Trans Particulars Cash Acct - 170 Debit in $ Credit in $ Balance 34500 34500 3 Land Trans 2 Particulars Cash Note Payable Acct - 172 Debit in $ Credit in $ Balance 5000 5000 17000 22000 Accounts Payable Trans Particulars 8 Office Equipment 10 Rent Expense 13 Cash Acct - 201 Debit in $ Credit in $ Balance 950 950 320 1270 950 320 Note Payable Trans Particulars 2 Land 6 Computer Equipment Acct - 250 Debit in $ Credit in $ Balance 17000 17000 3700 20700