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On August 1, 2014, Rafael Masey established Planet Realty, which completed the following transactions during the month:

a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business, $17,500.

b. Purchased supplies on account, $2,300.

c. Earned sales commissions, receiving cash, $13,300.

d. Paid rent on office and equipment for the month, $3,000.

e. Paid creditor on account, $1,150.

f. Withdrew cash for personal use, $1,800.

g. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400.

h. Paid office salaries, $2,800.

i. Determined that the cost of supplies used was $1,050.


Instructions

1. Journalize entries for transactions (a) through (i), using the following account titles: Cash; Supplies; Accounts Payable; Rafael Masey, Capital; Rafael Masey, Drawing; Sales Commissions; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. Journal entry explanations may be omitted.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.

3. Prepare an unadjusted trial balance as of August 31, 2014.

4. Determine the following:

a. Amount of total revenue recorded in the ledger.

b. Amount of total expenses recorded in the ledger.

c. Amount of net income for August.

5. Determine the increase or decrease in owner’s equity for August

Respuesta :

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Answer:

1) Journalize entries for transactions (a) through (i)

a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business, $17,500.

  • Dr Cash 17,500
  •     Cr Rafael Masey, capital 17,500

b. Purchased supplies on account, $2,300.

  • Dr Supplies 2,300
  •     Cr Accounts payable 2,300

c. Earned sales commissions, receiving cash, $13,300.

  • Dr Cash 13,300
  •     Cr Sales commissions 13,300

d. Paid rent on office and equipment for the month, $3,000.

  • Dr Rent expense 3,000
  •      Cr Cash 3,000

e. Paid creditor on account, $1,150.

  • Dr Accounts payable 1,150
  •     Cr Cash 1,150

f. Withdrew cash for personal use, $1,800.

  • Dr Rafael Masey, drawings 1,800
  •     Cr Cash 1,800

g. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400.

  • Dr Automobile expenses 1,500
  • Dr Miscellaneous expenses 400
  •      Cr Cash 1,900

h. Paid office salaries, $2,800.

  • Dr Office salaries expense 2,800
  •     Cr Cash 2,800

i. Determined that the cost of supplies used was $1,050.

  • Dr Supplies expense 1,050
  •     Cr Supplies 1,050

2) Prepare T accounts

          Cash

Debit            Credit

a. 17,500      d. 3,000

c. 13,300      e. 1,150

                    f. 1,800

                    g. 1,900

                    h. 2,800

20,150

Rafael Masey, capital

Debit            Credit

                    a. 17,500

                 

Rafael Masey, drawings

Debit            Credit

f. 1,800

       Supplies

Debit            Credit

b. 2,300       i. 1,050

1,250

Accounts payable

Debit            Credit

e. 1,150         b. 2,300

                    1,150

Sales commissions

Debit            Credit

                    c. 13,300

  Rent expense

Debit            Credit

d. 3,000

Automobile expense

Debit            Credit

g. 1,500

Miscellaneous expense

Debit            Credit

g. 400

Office salaries expense

Debit            Credit

h. 2,800

Supplies expense

Debit            Credit

i. 1,050

3) Prepare an unadjusted trial balance as of August 31, 2014.

Assets

Cash $20,150

Supplies $1,250

total assets = $21,400

Liabilities + Equity

Accounts payable $1,150

Rafael Masey, capital $20,250

total liabilities and equity = $21,400

4) a. Amount of total revenue recorded in the ledger.

  • $13,300

b. Amount of total expenses recorded in the ledger.

  • $8,750

c. Amount of net income for August.

  • $4,550

5) Determine the increase or decrease in owner’s equity for August

  • owner's equity increased by $4,550 during August