Towne Architects was incorporated as licensed architects on April 1, 2012. During the first month...
Question:
Towne Architects was incorporated as licensed architects on April 1, 2012. During the first month of the operation of the business, these events and transactions occurred:
| Apr. 1 | Stockholders invested $18,000 cash in exchange for the common stock of the corporation. |
| Apr. 1 | Hired a secretary-receptionist at a salary of $375 per week, payable monthly |
| Apr. 2 | Paid office rent for the month $900 |
| Apr. 3 | Purchased architectural supplies on account from Spring Green Company $1,300 |
| Apr. 10 | Completed blueprints on a carport and billed client $1,900 for services |
| Apr. 11 | Received $700 cash advance from J. Madison to design a new home |
| Apr. 20 | Received $2,800 cash for services completed and delivered to M. Svetlana |
| Apr. 30 | Paid secretary-receptionist for the month $1,500 |
| Apr. 30 | Paid $300 to Spring Green Company for accounts payable due |
(a) Journalize the transactions.
(b) Prepare a trial balance on April 30, 2012.
Trial Balance:
A trial balance can be defined as a financial statement with a list of debit and credit balances of the ledger accounts. The trial balance can be used to check the mathematical accuracy of the financial records.
Answer and Explanation: 1
(a)
Towne Architects
Journal entry
| Date | Particulars | Debit ($) | Credit ($) |
|---|---|---|---|
| Apr. 1 | Cash | 18,000 | |
| Common stock | 18,000 | ||
| Apr. 1 | No journal entry required | ||
| Apr. 2 | Rent expense | 900 | |
| Cash | 900 | ||
| Apr. 3 | Supplies | 1,300 | |
| Accounts payable | 1,300 | ||
| Apr. 10 | Accounts receivable | 1,900 | |
| Service revenue | 1,900 | ||
| Apr. 11 | Cash | 700 | |
| Unearned service revenue | 700 | ||
| Apr. 20 | Cash | 2,800 | |
| Service revenue | 2,800 | ||
| Apr. 30 | Salaries and wages expense | 1,500 | |
| Cash | 1,500 | ||
| Apr. 30 | Accounts payable | 300 | |
| Cash | 300 |
(b)
Towne Architects
Trial balance
Apr. 30, 2022
| Particulars | Debit ($) | Credit ($) |
|---|---|---|
| Cash | 18,800 | |
| Accounts receivable | 1,900 | |
| Supplies | 1,300 | |
| Accounts payable | 1,000 | |
| Unearned service revenue | 700 | |
| Common stock | 18,000 | |
| Service revenue | 4,700 | |
| Salaries and wages expense | 1,500 | |
| Rent expense | 900 | |
| Totals | 24,400 | 24,400 |
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