Journal entries and trial balance

Total of credit column: $70,300

On October 1,2018, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:

October 1st- Jay transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $18,000

October 4th- Paid rent for period of October 4 to end of month, $3,000.

October 10th- Purchased a used truck for $23,750, paying $3,750 cash and giving a note payable for the remainder.

October 13th- Purchased equipment on account, $10,500.

October 14th- Purchased supplies for cash, $2,100.

October 15th- Paid annual premiums on property and casualty insurance, $3,600.

15th- Received cash for job completed, $8,950.

.Enter the following transactions on page 2 of the two-column journal:

Oct 21- Paid creditor a portion of the amount owed for equipment purchased on October 13,$2,000

Oct 24- Recorded jobs completed on account and sent invoice to customers, $14,150.

Oct 26- Received an invoice for truck expenses, to be paid in November, $700.

Oct 27- Paid utilities expense, $2,400

27- Paid miscellaneous expenses, $1,100

Oct 29- Received cash from customers on account, $7,600

Oct 30- Paid wages of employees, $4,800

Oct 31- Paid dividends, $3,500

.Instructions

1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted.

11 Cash 31 Common stock

12 Accounts Receivable 33 Dividends

13 Supplies 41 Fees Earned

14 Prepaid Insurance 51 Wages Expense

16 Equipment 53 Rent Expense

18 Truck 54 Rent Expense

21 Notes Payable 55 Truck Expense

22 Accounts Payable 59 Miscellaneous Expense

2. Post the Journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2018

4. Determine the excess of revenues over expenses for October.

5. Can you think of any reason why the amount determined in (4) might not be the net income for October

 
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