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Answer:
Particulars Debit Credit
Equity 29,700.00
cash 35,180.00
Rent 2,250.00
Inventory 950.00
Accounts Payable 1,460.00
Sales 14,500.00
MV Expense 1,630.00
Salaries 2,000.00
Cost of Sales 1,350.00
Dividends 2,300.00
Totals 45,660.00 45,660.00
Explanation:
1. Journal Entries
Oct. 1 Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $29,700.
Dr Cash.............................29,700
Cr Common Stock....................29,700
2 Paid rent on office and equipment for the month, $2,250.
Dr. Rent........................2,250
Cr Cash.................................2,250
3. Purchased supplies on account, $2,300.
Dr Inventory..................2,300
Cr . Account Payables........................2,300
4 Paid creditor on account, $840.
Dr Account Payable..........840
Cr Cash......................................840
5 Earned sales commissions, receiving cash, $14,500.
Dr Cash......................................14,500
Cr . Sales ................................14,500
6 Paid automobile expenses (including rental charge) for month, $1,630, and miscellaneous expenses, $590.
Motor Vehicle Expenses............1,630
Cash....................................................1,630
7 Paid office salaries, $2,000.
Dr Salaries...............................2000
Cr Cash.............................................2000
8 Determined that the cost of supplies used was $1,350.
Dr. Cost of Sales.............................1,350
Cr. Inventory..............................................1,350
9 Paid dividends, $2,300.
Dr. Dividends ..............................2,300
Cr Cash.............................................2,300
2.Accounts Balances
Equity 29,700.00
Cash 35,180.00
Rent 2,250.00
Inventory 950.00
Accounts Payable 1,460.00
Sales 14,500.00
MV Expense 1,630.00
Salaries 2,000.00
Cost of Sales 1,350.00
Dividends 2,300.00
3. Adjusted Trial Balance
Particulars Debit Credit
Equity 29,700.00
cash 35,180.00
Rent 2,250.00
Inventory 950.00
Accounts Payable 1,460.00
Sales 14,500.00
MV Expense 1,630.00
Salaries 2,000.00
Cost of Sales 1,350.00
Dividends 2,300.00
Totals 45,660.00 45,660.00
4. . Determine the following:
a. Amount of total revenue = 14,500
b. Amount of total expenses.
Rent 2,250.00
MV Expense 1,630.00
Salaries 2,000.00
Cost of Sales 1,350.00
Dividends 2,300.00
Total 9,530.00
c. Amount of net income for October.
Net = 14,500 - 9530 = 4,970
5. Determine the increase or decrease in retained earnings for October.
Since this is a new business, the amount of Net-income is the net increase in retained earnings = 4,970.
1. Journal entries for the transactions:
Oct. 1: Debit Cash $29,700
Credit Common Stock $29,700
Oct. 2: Debit Rent Expense $2,250
Credit Cash $2,250
Oct. 3: Debit Supplies $2,300
Credit Accounts Payable $2,300
Oct. 4: Debit Accounts Payable $840
Credit Cash $840
Oct. 5: Debit Cash $14,500
Credit Sales Commissions Revenue $14,500
Oct. 6: Debit Automobile Expenses $1,630
Debit Miscellaneous Expenses $590
Credit Cash $2,220
Oct. 7: Debit Office Salaries Expense $2,000
Credit Cash $2,000
Oct. 8: Debit Supplies Expense $1,350
Credit Supplies $1,350
Oct. 9: Debit Dividends $2,300
Credit Cash $2,300
2. T-accounts:
Cash
Date Account Titles Debit Credit
Oct. 1: Common Stock $29,700
Oct. 2: Rent Expense $2,250
Oct. 4: Accounts Payable $840
Oct. 5: Commissions Revenue $14,500
Oct. 6: Automobile Expenses $1,630
Miscellaneous Expenses $590
Oct. 7: Office Salaries Expense $2,000
Oct. 9: Dividends $2,300
Oct. 9 Balance $34,590
Common Stock
Date Account Titles Debit Credit
Oct. 1: Cash $29,700
Rent Expense
Date Account Titles Debit Credit
Oct. 2: Cash $2,250
Supplies
Date Account Titles Debit Credit
Oct. 3: Accounts Payable $2,300
Oct. 8: Supplies Expense $1,350
Oct. 9 Balance $950
Accounts Payable
Date Account Titles Debit Credit
Oct. 3: Supplies $2,300
Oct. 4: Cash $840
Oct. 9 Balance $1,460
Commissions Revenue
Date Account Titles Debit Credit
Oct. 5: Cash $14,500
Automobile Expenses
Date Account Titles Debit Credit
Oct. 6: Cash $1,630
Miscellaneous Expenses
Date Account Titles Debit Credit
Oct. 6: Cash $590
Office Salaries Expenses
Date Account Titles Debit Credit
Oct. 7: Cash $2,000
Supplies Expenses
Date Account Titles Debit Credit
Oct. 8: Supplies $1,350
Dividends
Date Account Titles Debit Credit
Oct. 9: Cash $2,300
3. Unadjusted Trial Balance
Account Titles Debit Credit
Cash $34,590
Common stock $29,700
Accounts payable 1,460
Supplies 950
Commission Revenue 14,500
Rent expense 2,250
Automobile expense 1,630
Miscellaneous expense 590
Office salaries expense 2,000
Supplies expense 1,350
Dividends 2,300
Totals $45,660 $45,660
4. a. Amount of Total Revenue = $14,500
b. Amount of Total Expenses = ($7,820)
c. Amount of net income $6,680
5. Increase in retained earnings for October = $4,380 ($6,680 - $2,300)
Net Income minus Dividends
Data and Analysis:
Oct. 1: Cash $29,700 Common Stock $29,700
Oct. 2: Rent Expense $2,250 Cash $2,250
Oct. 3: Supplies $2,300 Accounts Payable $2,300
Oct. 4: Accounts Payable $840 Cash $840
Oct. 5: Cash $14,500 Commissions Revenue $14,500
Oct. 6: Automobile Expenses $1,630 Miscellaneous Expenses $590 Cash $2,220
Oct. 7: Office Salaries Expense $2,000 Cash $2,000
Oct. 8: Supplies Expense $1,350 Supplies $1,350
Oct. 9: Dividends $2,300 Cash $2,300
Total Expenses:
Rent expense 2,250
Automobile expense 1,630
Miscellaneous expense 590
Office salaries expense 2,000
Supplies expense 1,350
Total expenses $7,820
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