Question

On January 1, 2019, Sharon Matthews established Tri-City Realty, which completed the following transactions during the month: a. Sharon Matthews transferred cash from a personal bank account to an account to be used for the business, $40,000. b. Paid rent on office and equipment for the month, $6,000. c. Purchased supplies on account, $3,200. d. Paid creditor on account, $1,750. e. Earned fees, receiving cash, $18,250. f. Paid automobile expenses (including rental charge) for month, $1,880, and miscel- laneous expenses, $420. g. Paid office salaries, $5,000. h. Determined that the cost of supplies used was $1,400. i. Withdrew cash for personal use, $2,000.1. Journalize entries for transactions Jan. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles.2. Post the journal entries to the T accounts, selecting the appropriate date 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 January 31, 2019.4. 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 January.5. Determine the increase or decrease in ownerâs equity for January.

Answer 1

Answer:

Explanation:

Sharon Matthews/ Tri-City Realty

A. Journal entries

1. Owners start up capital

Debit Capital account with $40,000

Credit Cash account with $40,000

2. Rent of Office and Equipment

Debit Rent of Office and Equipment Account with $6,000

Credit Cash Account with $6,000

3. Supplies Purchased.

Debit Supplies Account with $3,200

Credit Accounts payable with $3,200

4. Part payment of Creditors balance

Debit Accounts payable with $1,750

Credit Cash with $1,750

5. Fees earned

Debit cash with $18,250

Credit Fees earned with $18,250

6. Automobile & miscellaneous expenses

Debit automobile expense with $1,880

Debit miscellaneous expense with $420

Credit cash with $2,300

7.Office salary

Debit Office Salary Account with $5,000

Credit Cash with $5,000

8. Supplies expensed

Debit Supplies expense account with $1,400

Credit supplies account with $1,400

9. Capital drawings

Debit Capital drawings with $2,000

Credit Cash with $2,000

B. Account Balances

Fees Received $18,250

Supplies expense $1,400

Office salary $5,000

Automobile expense $1,800

Miscellaneous expense $420

Rentals of Office & equipment $6,000

Payables (opening) = $3,200

Less Cash payment = -$1,750

Payables (closing) = $1,450

Capital Account = $40,000

Less drawings -$2,000

Capital (closing) = $38,000

Cash Account = $40,000 - $6,000 - $1,750 + $18,250 - $1,880 - $420 - $5,000 - $2,000 = $41,200

Supplies (opening) = $3,200

Supplies expensed = $1,400

Supplies (closing) = $1,800

C. Trial balance of Tri-City reality

Fees Received -$18,250

Supplies expense $1,400

Office salary $5,000

Automobile expense $1,880

Miscellaneous expense $420

Rentals of Office & equipment $6,000

Accounts payable -$1,450

Supplies $1,800

Cash $41,200

Capital -$38,000

Net income -$3,550

Total $0

D. Net income statement

Revenue $18,250

Less Expenses -$14,700

Net income $3,550

E. Change in owners equity

Capital Account = $40,000

Less drawings -$2,000

Capital (closing) = $38,000