Question

Tom Zopf owns and manages a computer repair service, which had the following trial balance on December 31, 2018 (the end of its fiscal year). Wildhorse Co. Trial balance December 31, 2018
Debit Credit
Cash $8,200
Accounts Receivable 14,800
Supplies 13,300
Prepaid Rent 1,600
Equipment 19,200
Accounts Payable $15,900
Common Stock 31,000
Retained Earnings 10,200
$57,100 $57,100

Summarized transactions for January 2019 were as follows.

1. Advertising costs, paid in cash, $1,160.
2. Additional supplies acquired on account $4,460.
3. Miscellaneous expenses, paid in cash, $2,180.
4. Cash collected from customers in payment of accounts receivable $12,130.
5. Cash paid to creditors for accounts payable due $12,570.
6. Repair services performed during January: for cash $6,860; on account $9,040.
7. Wages for January, paid in cash, $2,500.
8. Dividends during January were $2,520.

Required:
a. Post the journal entries to the accounts in the ledger.
b. Prepare a trial balance as of January 31, 2019.

Answer 1

Answer:

a)

1. Advertising costs, paid in cash, $1,160.

Dr Advertising expense 1,160

    Cr Cash 1,160

2. Additional supplies acquired on account $4,460.

Dr Supplies 4,460

    Cr Accounts payable 4,460

3. Miscellaneous expenses, paid in cash, $2,180.

Dr Miscellaneous expenses 2,180

    Cr Cash 2,180

4. Cash collected from customers in payment of accounts receivable $12,130.

Dr Cash 12,130

    Cr Accounts receivable 12,130

5. Cash paid to creditors for accounts payable due $12,570.

Dr Accounts payable 12,750

    Cr Cash 12,750

6. Repair services performed during January: for cash $6,860; on account $9,040.

Dr Cash 6,860

Dr Accounts receivable 9,040

    Cr Service revenue 15,900

7. Wages for January, paid in cash, $2,500.

Dr Wages expense 2,500

   Cr Cash 2,500

8. Dividends during January were $2,520.

Dr Dividends 2,520

    Cr Cash 2,520

b)

                                                Debit             Credit

Cash                                     $6,080

Accounts Receivable           $11,710

Supplies                              $17,760

Prepaid Rent                        $1,600

Equipment                          $19,200

Accounts Payable                                        $7,610

Common Stock                                          $31,000

Retained Earnings                                     $10,200

Service revenue                                        $15,900

Advertising expense           $1,160

Miscellaneous expenses    $2,180

Wages expense                 $2,500

Dividends                          $2,520                          

TOTALS                             $64,710           $64,710