Income Statement Accounts Sales Revenue, Salaries Expense, Wages Expense, and In
ID: 2698656 • Letter: I
Question
Income Statement Accounts
Sales Revenue, Salaries Expense, Wages Expense, and Interest Expense.
a. The owner opened a business account and deposited $60,000 in the bank.
b. The owner borrowed and deposited $30,000 on a note payable to the bank.
c. The owner paid one year of rent in advance on the restaurant space, $18,000 cash.
d. The owner purchased equipment $46,000; $16,000 in cash and the balance on account.
e. Furnishings were purchased for $30,400 cash.
f. The owner purchased $3,200 of food inventory on account and paid $3,800 cash for beverage inventory.
g. The owner purchased supplies for $2,650 cash.
h. The owner purchased $3,800 of food inventory on account.
i. The owner paid $2,700 for a one-year liability and casualty insurance policy.
j. Employees were paid wages of $12,800 and salaries of $2,400.
k. Sales revenue for the first month was $42,800; 90% cash, 8% credit cards, and 2% on accounts receivable.
l. The owner paid $16,600 on accounts payable.
m. The owner paid $8,000 on note payable, plus interest of $960.
Journalize each transaction and then post each transaction to a general ledger; prepare an unadjusted trial balance for the month ended March 31, 2006.
ALSO:
how much is the balance of credit account when you prepare an unadjusted tril balance for the month ended.
how much is the balance of debit account when you prepare an unadjusted trail balance for the month ended.
how much is the balance of cash account when you prepare an unadjusted trail balance for the month ended.
Explanation / Answer
Preparation of journal entries:
Date
Particulars
Debit($)
Credit($)
a
Owners' capital
60,000
Cash
60,000
(Owner introduced business)
b.
Cash
30,000
Notes payable
30,000
(Borrowed notes payable)
c
Preaid rent
18,000
Rent payable
18,000
(paid prepaid rent)
d.
Equipment
46,000
Cash
16,000
Accounts payable
30,000
(Purchased equipment)
e.
Furnishings
30,400
Cash
30,400
(Furnishings purchases for cash)
f.
Inventory: Food
3,200
Accounts payable
3,200
(Purchased food inventory on accounts)
Inventory: Beverage
3,800
Cash
3,800
(Purchased Beverage inventory for cash)
g.
Supplies
2,650
Cash
2,650
(Purchased supplied for cash)
h.
Purchases: Food inventory
3,800
Accounts payable
3,800
(Purchased food inventory)
i.
Liability
2,700
Cash
2,700
(Paid for one-year liability)
j.
Wages
12,800
Cash
12,800
(Wages paid)
Salaries
2,400
Cash
2,400
(Salaries paid)
k
Cash
38520
Credit sales
3424
Accounts receivables
856
Sales
42,800
(Sales revenue earned)
l.
Cash
16,000
Accounts payable
16,000
(Paid accounts payable)
m.
Noes payable
8,000
Interest expenses
960
8,960
Cash
(cash paid for clearing the notes)
Date
Particulars
Debit($)
Credit($)
a
Owners' capital
60,000
Cash
60,000
(Owner introduced business)
b.
Cash
30,000
Notes payable
30,000
(Borrowed notes payable)
c
Preaid rent
18,000
Rent payable
18,000
(paid prepaid rent)
d.
Equipment
46,000
Cash
16,000
Accounts payable
30,000
(Purchased equipment)
e.
Furnishings
30,400
Cash
30,400
(Furnishings purchases for cash)
f.
Inventory: Food
3,200
Accounts payable
3,200
(Purchased food inventory on accounts)
Inventory: Beverage
3,800
Cash
3,800
(Purchased Beverage inventory for cash)
g.
Supplies
2,650
Cash
2,650
(Purchased supplied for cash)
h.
Purchases: Food inventory
3,800
Accounts payable
3,800
(Purchased food inventory)
i.
Liability
2,700
Cash
2,700
(Paid for one-year liability)
j.
Wages
12,800
Cash
12,800
(Wages paid)
Salaries
2,400
Cash
2,400
(Salaries paid)
k
Cash
38520
Credit sales
3424
Accounts receivables
856
Sales
42,800
(Sales revenue earned)
l.
Cash
16,000
Accounts payable
16,000
(Paid accounts payable)
m.
Noes payable
8,000
Interest expenses
960
8,960
Cash
(cash paid for clearing the notes)