Iris Beck

[logistic_guy]

\(\displaystyle \text{Iris Beck}\) is a licensed \(\displaystyle \text{CPA}\). During the first month of operations of her business, the following events and transactions occurred.

May
\(\displaystyle \bold{1}\) \(\displaystyle \text{Beck}\) invested \(\displaystyle \$ 20,000\) cash in her business.
\(\displaystyle \bold{2}\) Hired a secretary-receptionist at a salary of \(\displaystyle \$ 2,000\) per month.
\(\displaystyle \bold{3}\) Purchased \(\displaystyle \$ 2,500\) of supplies on account from \(\displaystyle \text{Tinio Supply Company}\).
\(\displaystyle \bold{7}\) Paid office rent of \(\displaystyle \$ 900\) cash for the month.
\(\displaystyle \bold{11}\) Completed a tax assignment and billed client \(\displaystyle \$ 3,200\) for services performed.
\(\displaystyle \bold{12}\) Received \(\displaystyle \$ 3,500\) advance on a management consulting engagement.
\(\displaystyle \bold{17}\) Received cash of \(\displaystyle \$ 1,200\) for services performed for \(\displaystyle \text{Misra Co}\).
\(\displaystyle \bold{31}\) Paid secretary-receptionist \(\displaystyle \$ 2,000\) salary for the month.
\(\displaystyle \bold{31}\) Paid \(\displaystyle 60\%\) of balance due \(\displaystyle \text{Tinio Supply Company}\).

Instructions
\(\displaystyle \bold{(a)}\) Journalize the transactions.
\(\displaystyle \bold{(b)}\) Post to the ledger accounts.
\(\displaystyle \bold{(c)}\) Prepare a trial balance on May \(\displaystyle 31, 2017\).

 

[logistic_guy]

\(\displaystyle \bold{1}\) \(\displaystyle \text{Beck}\) invested \(\displaystyle \$ 20,000\) cash in her business.

1​	Account​	Debit​	Credit​
	Cash​	20,000​	​
	Owner's Capital​	​	20,000​

 

[logistic_guy]

\(\displaystyle \bold{2}\) Hired a secretary-receptionist at a salary of \(\displaystyle \$ 2,000\) per month.

No journal entry is required

 

[logistic_guy]

\(\displaystyle \bold{3}\) Purchased \(\displaystyle \$ 2,500\) of supplies on account from \(\displaystyle \text{Tinio Supply Company}\).

3​	Account​	Debit​	Credit​
	Supplies​	2,500​	​
	Accounts Payable​	​	2,500​

 

[logistic_guy]

\(\displaystyle \bold{7}\) Paid office rent of \(\displaystyle \$ 900\) cash for the month.

7​	Account​	Debit​	Credit​
	Rent Expense​	900​	​
	Cash​	​	900​

 

[logistic_guy]

\(\displaystyle \bold{11}\) Completed a tax assignment and billed client \(\displaystyle \$ 3,200\) for services performed.

11​	Account​	Debit​	Credit​
	Accounts Receivable​	3,200​	​
	Service Revenue​	​	3,200​

 

[logistic_guy]

\(\displaystyle \bold{12}\) Received \(\displaystyle \$ 3,500\) advance on a management consulting engagement.

12​	Account​	Debit​	Credit​
	Cash​	3,500​	​
	Unearned Service Revenue​	​	3,500​

 

[logistic_guy]

\(\displaystyle \bold{17}\) Received cash of \(\displaystyle \$ 1,200\) for services performed for \(\displaystyle \text{Misra Co}\).

17​	Account​	Debit​	Credit​
	Cash​	1,200​	​
	Service Revenue​	​	1,200​

 

[logistic_guy]

\(\displaystyle \bold{31}\) Paid secretary-receptionist \(\displaystyle \$ 2,000\) salary for the month.

31​	Account​	Debit​	Credit​
	Salaries and Wages Expense​	2,000​	​
	Cash​	​	2,000​

 

[logistic_guy]

\(\displaystyle \bold{31}\) Paid \(\displaystyle 60\%\) of balance due \(\displaystyle \text{Tinio Supply Company}\).

31​	Account​	Debit​	Credit​
	Accounts Payable​	1,500​	​
	Cash​	​	1,500​

 

[logistic_guy]

\(\displaystyle \bold{(b)}\)

Cash Ledger​

Date​	Explanation​	Debit​	Credit​	Balance​
May 1​	Initial Investment​	20,000​	​	20,000​
7​	Rent Payment​	​	900​	19,100​
12​	Cash Advance Received​	3,500​	​	22,600​
17​	Cash from Services​	1,200​	​	23,800​
31​	Salary Payment​	​	2,000​	21,800​
31​	Payment to Supplier​	​	1,500​	20,300​

 

[logistic_guy]

Account Receivable Ledger​

Date​	Explanation​	Debit​	Credit​	Balance​
May 11​	Services Performed​	3,200​	​	3,200​

 

[logistic_guy]

Supplies Ledger​

Date​	Explanation​	Debit​	Credit​	Balance​
May 3​	Supplies Purchased​	2,500​	​	2,500​

 

[logistic_guy]

Owner's Capital​

Date​	Explanation​	Debit​	Credit​	Balance​
May 1​	Initial Investment​	​	20,000​	20,000​

 

[logistic_guy]

Accounts Payable Ledger​

Date​	Explanation​	Debit​	Credit​	Balance​
May 3​	​	​	2,500​	2,500​
31​	​	1,500​	1,000​