Introduction to Accounting: Recording of Transactions (Other (Not Listed) Sample)

A01 Introduction to Accounting
Name
Institution

Part A (20 points)
Prepare in proper form c for the following transactions. Omit explanations.
October
2 Owner made a cash investment into the company $5,000
8 Bought supplies on account $100.
10 Paid salaries, $700
15 Paid for supplies purchased on October 8
21 Received company telephone bill, to be paid later, $30
Solution
Date Particulars Debit Credit
2-Oct Cash $5,000
Capital $5,000
8-Oct Supplies $100
Account payable $100
10-Oct Salaries Expense $700
Cash $700
15-Oct Account Payable $100
Cash $100
21-Oct Telephone Expense $30
Telephone Payable $30
Total $5,930 $5,930
Part B (5 points each for a possible total of 50 points)
Record the following selected transactions for January in a two-column journal, identifying each entry by letter:
(a) Earned $7,000 fees; customer will pay later.
(b) Purchased equipment for $45,000, paying $20,000 in cash and the remainder on credit
(c) Paid $3,000 for rent for January.
(d) Purchased $2,500 of supplies on account.
(e) A. Allen $1,000 investment in the company.
(f) Received $7,000 in cash for fees earned previously.
(g) Paid $1,200 to creditors on account.
(h) Paid wages of $6,250.
(i) Received $7,150 from customers on account.
(j) A. Allen withdrawal of $1,750.
Solution
A two-column journal is an entry method of entering accounting transactions in the business accounting records. Whenever, a journal transaction is recorded there are two accounts affected (Eisen, 2013). That is, a debit entry being recorded against one account there is a corresponding credit entry against the other account.
ParticularsDebit  Credita Account receivable $700
Sales $700
To record sales in the Sales Account
b Equipment $45,000
Cash $20,000
Account Payable $45,000
To record the purchase of an equipment
c Rent expense $3,500
Cash $3,500
To record the rent expense
d supplies $2,500
Account payable $2500
To record the purchase of supplies
e Cash $1,000
Capital $1,000
To record on investment
f Cash $7,000
Account receivable $7,000
To record the Cash received.
g Account payable $1,200
Cash $1,200
To record the payment made to creditors.
h Wages expense $6,250
Cash $6,250
To record the payment of wages
i Cash $7,150
Account receivable $7,150
To record cash received.
j Capital $1,750
Cash $1750
To record the withdrawal
Part C (10 points)
From the following items in the income statement columns of the worksheet of Friend's Tutoring at December 31, prepare the closing entries without explanation, assuming that a $1,000 withdrawal was made during the period.
Income Statement
Account Debit Credit
Tutoring Fees 3,450
Wages Expense 700
Rent Expense 600
Supplies Expense 450
Insurance Expense 250 _____
2,000 3,450
Net Income 1,450 _____
$3,450 $3,450
(5 points each for a possible total of 20 points) A summary of selected ledger accounts appear below for S. Ball for the current calendar year.


Solution
At the