Ken Jones, an architect, opened an office on April 1, 2016. During the month, he completed the...
Question:
Ken Jones, an architect, opened an office on April 1, 2016. During the month, he completed the following transactions connected with his professional practice:
| a. | Transferred cash from a personal bank account to an account to be used for the business, $18,000. |
| b. | Purchased used the automobile for $19,500, paying $2,500 cash and giving a note payable for the remainder. |
| c. | Paid April rent for office and workroom, $3,150. |
| d. | Paid cash for supplies, $1,450. |
| e. | Purchased office and computer equipment on account, $6,500. |
| f. | Paid cash for annual insurance policies on automobile and equipment, $2,400. |
| g. | Received cash from a client for plans delivered, $12,000. h.Paid cash to creditors on account, $1,800. |
| i. | Paid cash for miscellaneous expenses, $375. |
| j. | Received invoice for blueprint service, due in May, $2,500. |
| k. | Recorded fees earned on plans delivered, payment to be received in May, $15,650. |
| l. | Paid salary of assistant, $2,800. |
| m. | Paid cash for miscellaneous expenses, $200. |
| n. | Paid installment due on note payable, $300. |
| o. | Paid gas, oil, and repairs on automobile for April, $550. |
1. Record these transactions directly in the following T accounts, without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Ken Jones, Capital; Professional Fees; Rent Expense; Salary Expense; Blueprint Expense; Automobile Expense; Miscellaneous Expense. To the left of each amount entered in the accounts, select the appropriate letter to identify the transaction.
2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
3. Prepare an unadjusted trial balance for Ken Jones, Architect, as of April 30, 2016.
4. Determine the net income or net loss for April.
T Accounts:
T Accounts are graphical representations of general journal accounts. These tools are used to observe the effect of various transactions on the accounts' balances. T accounts have earned their names due to their "T" shape. On the top of the T, the account's title is located. Debits are recorded to the left side of the T, and credits are noted on the right.
Answer and Explanation: 1
Parts 1 and 2
| Cash | Accounts Receivable | Supplies | Prepaid Insurance | Automobiles | Equipment | Notes Payable | Accounts Payable | Ken Jones, Capital | Professional Fees | Rent Expense | Salary Expense | Blueprint Expense | Automobile Expense | Miscellaneous Expense | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | |
| a. | $18,000 | $18,000 | ||||||||||||||||||||||||||||
| b. | $2,500 | $19,500 | $17,000 | |||||||||||||||||||||||||||
| c. | $3,150 | $3,150 | ||||||||||||||||||||||||||||
| d. | $1,450 | $1,450 | ||||||||||||||||||||||||||||
| e. | $6,500 | $6,500 | ||||||||||||||||||||||||||||
| f. | $2,400 | $2,400 | ||||||||||||||||||||||||||||
| g. | $12,000 | $12,000 | ||||||||||||||||||||||||||||
| h. | $1,800 | $1,800 | ||||||||||||||||||||||||||||
| i. | $375 | $375 | ||||||||||||||||||||||||||||
| j. | $2,500 | $2,500 | ||||||||||||||||||||||||||||
| k. | $15,650 | $15,650 | ||||||||||||||||||||||||||||
| l. | $2,800 | $2,800 | ||||||||||||||||||||||||||||
| m. | $200 | $200 | ||||||||||||||||||||||||||||
| n. | $300 | $300 | ||||||||||||||||||||||||||||
| o. | $550 | $550 | ||||||||||||||||||||||||||||
| Subtotal | $30,000 | $15,525 | $15,650 | $0 | $1,450 | $0 | $2,400 | $0 | $19,500 | $0 | $6,500 | $0 | $300 | $17,000 | $1,800 | $9,000 | $0 | $18,000 | $0 | $27,650 | $3,150 | $0 | $2,800 | $0 | $2,500 | $0 | $550 | $0 | $575 | $0 |
| Ending Balance | $14,475 | $15,650 | $1,450 | $2,400 | $19,500 | $6,500 | $16,700 | $7,200 | $18,000 | $27,650 | $3,150 | $2,800 | $2,500 | $550 | $575 | |||||||||||||||
Part 3
| Unadjusted Trial Balance | Debit | Credit |
|---|---|---|
| Cash | $14,475 | |
| Accounts Receivable | $15,650 | |
| Supplies | $1,450 | |
| Prepaid Insurance | $2,400 | |
| Automobiles | $19,500 | |
| Equipment | $6,500 | |
| Notes Payable | $16,700 | |
| Accounts Payable | $7,200 | |
| Ken Jones, Capital | $18,000 | |
| Professional Fees | $27,650 | |
| Rent Expense | $3,150 | |
| Salary Expense | $2,800 | |
| Blueprint Expense | $2,500 | |
| Automobile Expense | $550 | |
| Miscellaneous Expense | $575 | |
| Total | $69,550 | $69,550 |
Part 4
| Revenues: | ||
| Professional Fees | $27,650 | |
| Less Expenses: | ||
| Rent Expense | $3,150 | |
| Salary Expense | $2,800 | |
| Blueprint Expense | $2,500 | |
| Automobile Expense | $550 | |
| Miscellaneous Expense | $575 | $9,575 |
| Net Income | $18,075 |
Learn more about this topic:
from
Chapter 3 / Lesson 6Two key elements in accounting are debits and credits. Understand these critical pieces of notation by exploring the definitions and purposes of debits and credits and how they help form the basics of double-entry accounting.