On October 1, 2008, Kristy Gomez established an interior decorating business, Ultimate Designs. During the month, Kristy Gomez completed the following transactions related to the business:
Oct. 1. Kristy transferred cash from a personal bank account to an account to be used for the business, $20,000.
3. Paid rent for period of October 3 to end of month, $1,600.
10. Purchased a truck for $15,000, paying $5,000 cash and giving a note payable for the remainder.
13. Purchased equipment on account, $4,500.
14. Purchased supplies for cash, $1,100.
15. Paid annual premiums on property and casualty insurance, $2,800.
15. Received cash for job completed, $6,100.
21. Paid creditor a portion of the amount owed for equipment purchased on October 13, $2,400.
24. Recorded jobs completed on account and sent invoices to customers, $8,600.
26. Received an invoice for truck expenses, to be paid in November, $875.
27. Paid utilities expense, $900.
27. Paid miscellaneous expenses, $315.
29. Received cash from customers on account, $4,100.
30. Paid wages of employees, $2,500.
31. Withdrew cash for personal use, $3,000.
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.) Journal entry explanations may be omitted.
|
11 |
Cash |
31 |
Kristy Gomez, Capital |
|
12 |
Accounts Receivable |
32 |
Kristy Gomez, 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 Ultimate Designs as of October 31, 2008.