On June 1, 2008, Brooks Dodd established an interior decorating business, Coordinated Designs. During the month, Brooks completed the following transactions related to the business:
June 1. Brooks transferred cash from a personal bank account to an account to be used for the business, $18,000.
5. Paid rent for period of June 5 to end of month, $2,150.
6. Purchased office equipment on account, $8,500.
8. Purchased a used truck for $18,000, paying $10,000 cash and giving a note payable for the remainder.
10. Purchased supplies for cash, $1,200.
12. Received cash for job completed, $10,500.
15. Paid annual premiums on property and casualty insurance, $2,400.
23. Recorded jobs completed on account and sent invoices to customers, $5,950.
24. Received an invoice for truck expenses, to be paid in July, $1,000.
29. Paid utilities expense, $1,200.
29. Paid miscellaneous expenses, $400.
30. Received cash from customers on account, $3,200.
30. Paid wages of employees, $2,900.
30. Paid creditor a portion of the amount owed for equipment purchased on June 6, $2,125.
30. Withdrew cash for personal use, $1,750.
Instructions
1. Journalize each transaction in a two column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.
|
11 |
Cash |
31 |
Brooks Dodd, Capital |
|
12 |
Accounts Receivable |
32 |
Brooks Dodd, Drawing |
|
13 |
Supplies |
41 |
Fees Earned |
|
14 |
Prepaid Insurance |
51 |
Wages Expense |
|
16 |
Equipment |
53 |
Rent Expense |
|
18 |
Truck |
54 |
Utilities Expense |
|
21 |
Notes Payable |
55 |
Truck Expense |
|
22 |
Accounts Payable |
59 |
Miscellaneous Expense |
2. Post the journal to a ledger of four column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.
3. Prepare an unadjusted trial balance for Coordinated Designs as of June 30, 2008.