ACC 231 Lecture Notes - Lecture 3: Mike Markkula, General Ledger, Retained Earnings

139 views3 pages

cerisegiraffe538

7 Feb 2018

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Determine accounts affected, account type, increase or decrease and a debit(dr) or credit(cr) for transactions: 1. feb 2 performed service for customers on account, and charged ,425. 2. feb 8 purchased supplies on account for . 4. feb 14 received cash of from customers who had used credit. 5. feb 21 paid to supplier for previous purchase using credit. 6. feb 26 performed service for customers and received cash, ,850. A t-account is a way to keep track of the activity and balance in an account. The t-account for cash would look like this for the transactions we just did (wolfe powerpoint) General journal :a record of all transactions (journal entries) for the business. Includes: date, the debit account and amount, the credit account and amount, and may include the purpose of the entry . especially correcting entries. General ledger: lists all activity by account. For instance under cash we would see each transaction during the month that affected cash.

Related Questions

At June 30, 2017, the end of its most recent fiscal year, Primrose Comp Consultantsâ post-closing trial balance was as follows:

	Debit	Credit
Cash	$5,860
Accounts receivable	1,340
Supplies	770
Accounts payable		$450
Unearned service revenue		1,250
Common stock		4,000
Retained earnings		2,270
	$7,970	$7,970

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Culver conducted the following transactions during July 2017, and adjusts its accounts monthly.

July	1	Purchased equipment, paying $4,000 cash and signing a 2-year note payable for $22,400. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month.
	2	Issued 22,400 shares of common stock for $56,000 cash.
	3	Paid $4,200 cash for a 12-month insurance policy effective July 1.
	3	Paid the first 2 (July and August 2017) monthsâ rent for an annual lease of office space for $4,500 per month.
	6	Paid $4,300 for supplies.
	9	Visited client offices and agreed on the terms of a consulting project. Culver will bill the client, Connor Productions, on the 20th of each month for services performed.
	10	Collected $1,340 cash on account from Milani Brothers. This client was billed in June when Culver performed the service.
	13	Performed services for Fitzgerald Enterprises. This client paid $1,250 in advance last month. All services relating to this payment are now completed.
	14	Paid $450 cash for a utility bill. This related to June utilities that were accrued at the end of June.
	16	Met with a new client, Thunder Bay Technologies. Received $13,400 cash in advance for future services to be performed.
	18	Paid semi-monthly salaries for $12,300.
	20	Performed services worth $31,400 on account and billed customers.
	20	Received a bill for $2,500 for advertising services received during July. The amount is not due until August 15.
	23	Performed the first phase of the project for Thunder Bay Technologies. Recognized $11,200 of revenue from the cash advance received July 16.
	27	Received $16,800 cash from customers billed on July 20.

Adjustment data:

1.		Adjustment of prepaid insurance.
2.		Adjustment of prepaid rent.
3.		Supplies used, $1,400.
4.		Equipment depreciation, $550 per month.
5.		Accrual of interest on note payable.
6.		Salaries for the second half of July, $12,300, to be paid on August 1.
7.		Estimated utilities expense for July, $900 (invoice will be received in August).
8.		Income tax for July, $1,340, will be paid in August

*Journalize July Transactions**

brownwolf69

I need to journalize these transactions. Trying to keep thesebalanced is difficult, and I've been confused as to what accountsto debit/credit. If you could help me fill this out, that would begreatly appreciated.

For the past several years, Aaron Jones has operated aconsulting business from his home on a part-time basis. As ofDecember 1, 20X1, Aaron decided to move to rented quarters andincorporate his business as Progress Consulting Inc. ProgressConsulting entered into the following transactions duringDecember:

1st AaronJones invested the following assets in the business: cash, $50,000;supplies,

$10,000; and office equipment, $30,000. Mr. Jones received stockin an

amount equal to his investment in the corporation.

2nd Paid $9,000for rent for December 20X1 through February 28, 20X2.

3rd Paid$12,000 for a one year premium on property and casualty insurance.The

policy covers the period December 1, 20X1 to November 30,20X2.

4th Received $16,000 cash from a client as an advance payment forservices to be

performed in the future.

5th Purchased additional office equipment on account from Payne Companyfor $10,000.

10th Paid $7,500 for anewspaper advertisement that ran in todayâs paper.

11th Paid Payne Company$3,000 for part of the debt incurred on December 5.

12th Billed clients forservices performed on account, $5,800.

17th Received cash paymentfrom client for services performed on this date, $14,000.

18th Paid $6,000 forsupplies.

20th Billed clients forservices performed on account, $15,000.

24th Received cash paymentfrom client for services performed on this date, $2,000.

25th Received cash fromclients as payment on account, $3,000.

30th Paid $750 forutilities for December.

31st Paid cash dividend of$5,000.

These are the accounts we have:

PROGRESS CONSULTING: Chart of Accounts

11 Cash

12 Accounts Receivable

14 Supplies

15 Prepaid Rent

17 Prepaid Insurance

18 Office Equipment

19 Accumulated Depreciation

21 Accounts Payable

22 Wages Payable

23 Unearned Revenues

31 Common Stock

34 Retained Earnings

35 Dividends

37 Income Summary

41 Service Revenues

51 Insurance Expense

52 Advertising Expense

53 Rent Expense

55 Supplies Expense

57 Depreciation Expense

59 Utilities Expense

60 Wage Expense

Date		Description	Debit	Credit
Dec	1	Cash	50,000
	1	Supplies	10,000
	1	Office Equipment	30,000
	1	Common Stock		90,000
	2

yellowfish481

I have already answered questions 1 and 2, I don't need help with those. I posted those for the information in case you need it for the other questions.

[The following information applies to the questions displayed below.]

Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $10. At the start of January 2015, VGCâs income statement accounts had zero balances and its balance sheet account balances were as follows:


Cash	$	2,360,000
Accounts Receivable		152,000
Supplies		19,100
Equipment		948,000
Land		1,920,000
Building		506,000
Accounts Payable		109,000
Unearned Revenue		152,000
Notes Payable (due 2018)		80,000
Common Stock		2,200,000
Retained Earnings		3,364,100

In addition to the above accounts, VGCâs chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense.

Required:

1.	Analyze the effect of the January transactions (shown below) on the accounting equation, and indicate the account, amount, and direction of the effect (+ for increase and â for decrease) of each transaction. (Enter any decreases to account balances with a minus sign.)

a.	Received $52,250 cash from customers for subscriptions that had already been earned in 2014.
b.	Received $235,000 cash from Electronic Arts, Inc. for service revenue earned in January.
c.	Purchased 10 new computer servers for $41,900; paid $12,000 cash and signed a three-year note for the remainder owed.
d.	Paid $15,600 for an Internet advertisement run on Yahoo! in January.
e.	Sold 10,100 monthly subscriptions at $10 each for services provided during January. Half was collected in cash and half was sold on account.
f.	Received an electric and gas utility bill for $5,900 for January utility services. The bill will be paid in February.
g.	Paid $310,000 in wages to employees for work done in January.
h.	Purchased $5,100 of supplies on account.
i.	Paid $5,100 cash to the supplier in (h).

	Assets		=	Liabilities		+	Stockholdersâ Equity
a.	Cash	52,250
	Accounts Receivable	(52,250)
b.	Cash	235,000					Service Revenue	235,000
c.	Equipment	41,900
	Cash	(12,000)		Notes Payable (long-term)	29,900
d.	Cash	(15,600)					Advertising Expense	(15,600)
e.	Cash	50,500					Service Revenue	101,000
	Accounts Receivable	50,500
f.				Accounts Payable	5,900		Utilities Expense	(5,900)
g.	Cash	(310,000)					Salaries and Wages Expense	(310,000)
h.	Supplies	5,100		Accounts Payable	5,100
i.	Cash	(5,100)		Accounts Payable	(5,100)

2.	Prepare journal entries for the January transactions listed in part 1, using the letter of each transaction as a reference. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

No	Transaction	General Journal	Debit	Credit
1	a	Cash	52,250
1		Accounts Receivable		52,250

2	b	Cash	235,000
2		Service Revenue		235,000

3	c	Equipment	41,900
3		Cash		12,000
3		Notes Payable (long-term)		29,900

4	d	Advertising Expense	15,600
4		Cash		15,600

5	e	Cash	50,500
5		Accounts Receivable	50,500
5		Service Revenue		101,000

6	f	Utilities Expense	5,900
6		Accounts Payable		5,900

7	g	Salaries and Wages Expense	310,000
7		Cash		310,000

8	h	Supplies	5,100
8		Accounts Payable		5,100

9	i	Accounts Payable	5,100
9		Cash		5,100

3.	Create T-accounts, enter the beginning balances shown above, post the journal entries to the T-accounts, and show the unadjusted ending balances in the T-accounts.

4.	Prepare an unadjusted trial balance as of January 31, 2015.

VANISHING GAMES CORPORATION
Unadjusted Trial Balance
At January 31, 2015
Account Name	Debit	Credit
Cash
Accounts Receivable
Supplies
Equipment
Buildings
Land
Accounts Payable
Unearned Revenue
Notes Payable (long-term)
Common Stock
Retained Earnings
Service Revenue
Salaries and Wages Expense
Advertising Expense
Utilities Expense
Total	$0	$0

5.	Prepare an Income Statement for the month ended January 31, 2015, using unadjusted balances from part 4.

VANISHING GAMES CORPORATION
Income Statement
For the Month Ended January 31, 2015
Revenues

Service Revenue
Total Revenues
Expenses
Salaries and Wages Expense
Utilities Expense
Advertising Expense

Total Expenses
Net Income

Prepare a Statement of Retained Earnings for the month ended January 31, 2015, using the beginning balance given above and the net income from part 5. Assume VGC has no dividends.

VANISHING GAMES CORPORATION
Statement of Retained Earnings
For the Month Ended January 31, 2015
Retained Earnings, January 1, 2015
Add: Net Income
Less: Dividends
Retained Earnings, January 31, 2015	$0

blackpug639

ACC 231 Lecture Notes - Lecture 3: Mike Markkula, General Ledger, Retained Earnings

Document Summary

Get access

Related Documents

ACC 231 Lecture Notes - Lecture 2: Deferral, Accounting Equation

ACC 231 Study Guide - Final Guide: Issued Shares, Financial Statement, Financial Analysis

ACC 231 Lecture Notes - Lecture 7: Rei

Related Questions