On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed
ID: 2328604 • Letter: O
Question
On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month:
Required:
Jan. 1 Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $31,500. 2 Paid rent on office and equipment for the month, $2,750. 3 Purchased supplies on account, $2,350. 4 Paid creditor on account, $800. 5 Earned fees, receiving cash, $16,160. 6 Paid automobile expenses (including rental charge) for month, $1,640, and miscellaneous expenses, $450. 7 Paid office salaries, $2,400. 8 Determined that the cost of supplies used was $1,150. 9 Withdrew cash for personal use, $2,000.Explanation / Answer
Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1 Cash 31,500.00 Sharon Matthews, Capital 31,500.00 (record the capital introduced) 2 Rent Expense 2,750.00 Cash 2,750.00 (record the rent paid) 3 Supplies 2,350.00 Accounts Payable 2,350.00 (record the supplies purchased) 4 Accounts Payable 800.00 Cash 800.00 (record the cash paid) 5 Cash 16,160.00 Fees earned 16,160.00 (Record the fees earned) 6 Automobile Expenses 1,640.00 Miscellaneous Expense 450.00 Cash 2,090.00 (record the automobile & misc expense) 7 Salaries Expense 2,400.00 Cash 2,400.00 (Record the salaries expense) 8 Supplies Expense 1,150.00 Supplies 1,150.00 (record the supplies expense) 9 Sharon Matthews, Withdrawl 2,000.00 Cash 2,000.00 (record the cash withdrawl) Answer 2. Cash Supplies Accounts Payable 1 31,500.00 2,750.00 2 3 2,350.00 1,150.00 8 4 800.00 2,350.00 3 5 16,160.00 800.00 4 2,090.00 6 2,400.00 7 2,000.00 9 End. Bal. 37,620.00 End. Bal. 1,200.00 End. Bal. 1,550.00 Sharon Matthews, Capital Sharon Matthews, Withdrawl 31,500.00 1 9 2,000.00 End. Bal. 31,500.00 End. Bal. 2,000.00 Fees Earned Automobile Expense Rent Expense 16,160.00 5 6 1,640.00 2 2,750.00 End. Bal. 16,160.00 End. Bal. 1,640.00 End. Bal. 2,750.00 Misc. Expense Salaries Expense Supplies Expense 6 450.00 7 2,400.00 8 1,150.00 End. Bal. 450.00 End. Bal. 2,400.00 End. Bal. 1,150.00 Trial Balance As on Jan 31, 2019 Accounts Title Debits Credits Cash 37,620.00 Supplies 1,200.00 Accounts Payable 1,550.00 Sharon Matthews, Capital 31,500.00 Sharon Matthews, Withdrawl 2,000.00 Fees Earned 16,160.00 Automobile Expense 1,640.00 Rent Expense 2,750.00 Misc. Expense 450.00 Salaries Expense 2,400.00 Supplies Expense 1,150.00 Total 49,210.00 49,210.00 - Answer 4. a. Amount of total revenue recorded 16,160.00 b. Amount of total expenses recorded Automobile Expense 1,640.00 Rent Expense 2,750.00 Misc. Expense 450.00 Salaries Expense 2,400.00 Supplies Expense 1,150.00 Total expense 8,390.00 c. Amount of net income ($16,160 - $8,390) 7,770.00 Answer 5. Increase (Decrease) in Owner's Equity Net Income 7,770.00 Sharon Matthews, Withdrawl (2,000.00) Increase (Decrease) in Owner's Equity 5,770.00