Posting a $2,500 purchase of office supplies on accow1t appears as follows:

$$\overset{\normalsize\text{Cash}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Office Supplies}}{\begin{array}{c|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\\ \phantom{s}\\ \overset{\normalsize\text{Office Supplies}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Accounts Payable}}{\begin{array}{c|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\\ \phantom{s}\\ \overset{\normalsize\text{Office Supplies}}{\begin{array}{c|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Accounts Receivable}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}\\ \phantom{s}\\ \overset{\normalsize\text{Office Supplies}}{\begin{array}{l|c} \hline \text{\qquad\quad\qquad2,500}&\phantom{2,500\qquad\qquad\quad} \end{array}}\qquad \overset{\normalsize\text{Accounts Payable}}{\begin{array}{c|c} \hline \phantom{2,500\qquad\quad\qquad}&\text{2,500\qquad\qquad\quad} \end{array}}$$

Arkansas Sales Consultants completed the following transactions during the latter part of January:

Jan. 22. Performed services for customers on account, $9,000. 30. Received cash on account from customers,$7,000. 31. Received a utility bill, $210, which will be paid during February. 31. Paid monthly salary to salesman,$2,400. 31. Received $2,475 for three months of consulting service to be performed starting in February. 31. Cash dividends of$900 were paid to stockholders.

Journalize the transactions of Arkansas Sales Consultants. Include an explanation with each journal entry.

What is a T-account? On which side is the debit? On which side is the credit? Where does the account name go on a T-account?

Your business purchased office supplies of $2,500 on account. The journal entry to record this transaction is as follows: |Date|Accounts and Explanation|Debit|Credit| |-|-|-:|-:| |a.|Office Supplies|2,500|| ||$    $Accounts Receivable||2,500| |b.|Office Supplies|2,500|| ||$    $Accounts Payable||2,500| |c.|Accounts Payable|2,500|| ||$    $Office Supplies||2,500| |d.|Cash|2,500|| ||$    $Accounts Payable||2,500|

Consider the following transactional data for the first month of operations for Crystal Clear Cleaning.

Nov. 1. Stockholders contributed $35,000 and a truck, with a market value of$7,000, to the business in exchange for common stock. 2. The business paid $2,000 to Pleasant Properties for November through February rent.(Debit Prepaid Rent) 3. Paid$1,800 for a business insurance policy for the term November 1, 2017 through October 31, 2018. (Debit Prepaid Insurance) 4. Purchased cleaning supplies on account, $220. 5. Purchased on account an industrial vacuum cleaner costing$2,000. The invoice is payable November 25. 7. Paid $1,200 for a computer and printer. 9. Performed cleaning services on account in the amount of$3,800. 10. Received $300 for services rendered on November 9. 15. Paid employees,$350. 16. Received $12,000 for a 1-year contract beginning November 16 for cleaning services to be provided. Contract begins November 16, 2017, and ends November 15, 2018. (Credit Unearned Revenue) 17. Provided cleaning services and received$1,000 cash. 18. Received a utility bill for $250 with a due date of December 4, 2017. (Use Accounts Payable) 20. Borrowed$96,000 from bank with interest rate of 9% per year. 21. Received $900 on account for services performed on November 9. 25. Paid$1,000 on account for vacuum cleaner purchased on November 5. 29. Paid $500 for advertising. 30. Cash dividends of$200 were paid to stockholders.

Requirements

1. Journalize the transactions, using the following accounts: Cash; Accounts Receivable; Cleaning Supplies; Prepaid Rent; Prepaid Insurance; Equipment; Truck; Accounts Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Advertising Expense; and Utilities Expense. Explanations are not required.
2. Open a T-account for each account.
3. Post the journal entries to the T-accounts, and calculate account balances. Formal posting references are not required.
4. Prepare a trial balance as of November 30, 2017.

Problem P2-41 continues with the consulting business begun in Problem Pl-54 in Chapter 1. Here you will account for Daniels Consul ting's transactions as it is actually done in practice. Daniels Consulting completed the following transactions during December 2016:

Dec. 2. Stockholders contributed $20,000 cash in exchange for common stock. 2. Paid monthly office rent,$2,000. 3. Paid cash for a computer, $3,600. This equipment is expected to remain in service for five years. 4. Purchased office furniture on account,$3,000. The furniture should last for five years. 5. Purchased office supplies on account, $800. 9. Performed consulting service for a client on account,$2,500. 12. Paid utilities expenses, $150. 18. Performed service for a client and received cash of$2,100. 21. Received $2,400 in advance for client service to be performed in the future. 21. Hired an administrative assistant to be paid$2,055 on the 20th day of each month. The secretary begins work immediately. 26. Paid $200 on account. 28. Collected$400 on account. 30. Cash dividends of $1,000 were paid to stockholders.

Requirements

1. Journalize the transactions, using the following accounts: Cash; Accounts Receivable; Office Supplies; Equipment; Furniture; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Rent Expense; and Utilities Expense. Explanations are not required.
2. Open a T-account for each of the accounts.
3. Post the journal entries to the T-accounts, and calculate account balances. Formal posting references are not required.
4. Prepare a trial balance as of December 3 1, 2016.
5. Prepare the income statement of Daniels Consulting for the month ended December 31, 2016.
6. Prepare the statement of retained earnings for the month ended December 31, 2016.
7. Prepare the balance sheet as of December 31, 2016.
8. Calculate the debt ratio for Daniels Consulting at December 31, 2016.

The trial balance as of July 31, 2017, for Sarah Silk, Registered Dietician, is presented below:

$$\begin{array}{c} \textbf{SARAH SILK, REGISTERED DIETICIAN}\\ \text{Trial Balance}\\ \text{July 31, 2017}\\ \end{array}$$

$$\begin{array}{lrr} &\textbf{Balance}\\ \textbf{Account Title}&\textbf{Debit}&\textbf{Credit}\\ \text{Cash}&\$30,000\\ \text{Accounts Receivable}&9,700\\ \text{Office Supplies}&2,200\\ \text{Prepaid Insurance}&2,7000\\ \text{Equipment}&20,000\\ \text{Accounts Payable}&&\$3,400\\ \text{Unearned Revenue}&&5,192\\ \text{Notes Payable}&&25,000\\ \text{Common Stock}&&26,000\\ \text{Dividends}&2,590\\ \text{Service Revenue}&&9,585\\ \text{Salaries Expense}&1,300\\ \text{Rent Expense}&800\\ \text{Utilities Expense}&250\\ \text{Total}&\underline{\underline{\$69,450}}&\underline{\underline{\$69,450}}\\ \end{array}$$

Requirements

1. Prepare the income statement for the month ended July 3 1, 2017.
2. Prepare the statement of retained earnings for the month ended July 31, 2017. The beginning balance of retained earnings was $0.
3. Prepare the balance sheet as of July 3 1, 2017.
4. Calculate the debt ratio as of July 31, 2017.

Jack Davis opened a medical practice in Sacramento, California, and had the following transactions during the month of January.

Jan. 1. The business received $35,000 cash and issued common stock to Davis. 2. Purchased medical supplies on account,$13,000. 4. Performed services for patients receiving $1,900. 12. Paid monthly office rent of$2,600. 15. Recorded $10,000 revenue for services rendered to patients on account.

Journalize the transactions of Jack Davis, M.D. Include an explanation with each entry.

Your business purchased office supplies of $2,500 on account. The journal entry to record this transaction is as follows: |Date|Accounts and Explanation|Debit|Credit| |-|-|-:|-:| |a.|Office Supplies|2,500|| ||$    $Accounts Receivable||2,500| |b.|Office Supplies|2,500|| ||$    $Accounts Payable||2,500| |c.|Accounts Payable|2,500|| ||$    $Office Supplies||2,500| |d.|Cash|2,500|| ||$    $Accounts Payable||2,500|

Accounting uses a double-entry system. Explain what this sentence means.

The trial balance of Learn for Life Child Care does not balance.

$$\begin{array}{c} \textbf{LEARN FOR LIFE CHILD CARE}\\ \text{Trial Balance}\\ \text{May 31, 2017}\\ \end{array}$$

$$\begin{array}{lrr} &\textbf{Balance}\\ \textbf{Account Title}&\textbf{Debit}&\textbf{Credit}\\ \text{Cash}&\$8,400\\ \text{Accounts Receivable}&8,100\\ \text{Office Supplies}&900\\ \text{Prepaid Insurance}&1,000\\ \text{Equipment}&89,300\\ \text{Accounts Payable}&&\$3,500\\ \text{Notes Payable}&&48,000\\ \text{Common Stock}&&54,000\\ \text{Dividends}&3,600\\ \text{Service Revenue}&&11,500\\ \text{Salaries Expense}&5,100\\ \text{Rent Expense}&900\\ \text{Total}&\underline{\underline{\$117,300}}&\underline{\underline{\$117,000}}\\ \end{array}$$

The following errors are detected: a. Cash is understated by $1,800. b. A$3,900 debit to Accounts Receivable was posted as a credit. c. A $1,200 purchase of office supplies on account was neither journalized nor posted. d. Equipment was incorrectly transferred from the ledger as$89,300. It should have been transferred as $81,500. e. Salaries Expense is overstated by$500. f. A $600 cash payment for advertising expense was neither journalized nor posted. g. A$ 100 cash dividend was incorrectly journalized as $1,000. h. Service Revenue was understated by$4,200. i. A 12-month insurance policy was posted as a $1,300 credit to Prepaid Insurance. Cash was posted correctly. Prepare the corrected trial balance as of May 31, 2017. Journal entries are not re quired.

The trial balance of James Howe, CPA, is dared March 31, 2017:

$$\begin{array}{c} \textbf{JAMES HOWE, CPA}\\ \text{Trial Balance}\\ \text{March 31, 2017}\\ \end{array}$$

$$\begin{array}{lrr} &\textbf{Balance}\\ \textbf{Account Title}&\textbf{Debit}&\textbf{Credit}\\ \text{Cash}&\$10,000\\ \text{Accounts Receivable}&7,500\\ \text{Office Supplies}&400\\ \text{Furniture}&0\\ \text{Automobile}&0\\ \text{Land}&27,000\\ \text{Accounts Payable}&&\$4,200\\ \text{Unearned Revenue}&&0\\ \text{Common Stock}&&33,300\\ \text{Dividends}&0\\ \text{Service Revenue}&&10,800\\ \text{Salaries Expense}&2,500\\ \text{Rent Expense}&900\\ \text{Total}&\underline{\underline{\$48,300}}&\underline{\underline{\$48,300}}\\ \end{array}$$

During April, the business completed the following transactions:

Apr, 4. Collected $\$ 2.000$ cash from a client on account. 8. Performed tax services for a client on account, $\$ 5,400$. 13. Paid $\$ 3,300$ on account. 14. Purchased furniture on account, $\$ 4,600$. 15. Howe contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of $\$ 10,000$. 18. Purchased office supplies on account, $\$ 1,000$. 19. Received $\$ 2,700$ for tax services performed on April 8. 20. Paid cash dividends of $\$ 4,000$. 21. Received $\$ 3.800$ cash for consulting work completed. 24. Received $\$ 1,400$ cash for accounting services to be completed next month. 27. Paid office rent, $\$ 600$. 28. Paid employee salary, $1,000.

Requirements

1. Record the April transactions in the journal using the following accounts: Cash; Accounts Receivable; Office Supplies; Furniture; Automobile; Land; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; and Rent Expense. Include an explanation for each entry.
2. Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11 ; Accounts Receivable, 12; Office Supplies, 13; Furniture, 14; Automobile, 15; Land, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52.
3. Post the journal entries to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Assume the journal entries were recorded on page 5 of the journal.
4. Prepare the trial balance of James Howe, CPA, at April 30, 2017.

Trevor Moore opened a law office on April 1, 2017. During the first month of operations, the business completed the following transactions:

Apr. 1. Moore contributed $76,000 cash to the business, Trevor Moore, Attorney. The business issued common stock to Moore. 3. Purchased office supplies,$400, and furniture, $2,200, on account. 4. Performed legal services for a client and received$900 cash. 7. Purchased a building with a market value of $120,000, and land with a market value of$29,000. The business paid $45,000 cash and signed a note payable to the bank for the remaining amount. 11. Prepared legal documents for a client on account,$800. 15. Paid assistant's semimonthly salary, $1,230. 16. Paid for the office supplies purchased on April 3 on account. 18. Received$2,800 cash for helping a client sell real estate. 19. Defended a client in court and billed the client for $1,500. 25. Received a bill for utilities,$650. The bill will be paid next month. 28. Received cash on account, $1,700. 29. Paid$4,800 cash for a 12-month insurance policy starting on May 1. 29. Paid assistant's semimonthly salary, $1,230. 30. Paid monthly rent expense,$1,100. 30. Paid cash dividends of $2,000.

Requirements

1. Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Furniture; Building; Land; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.
2. Open the following four-column accounts including account numbers: Cash, 101; Accounts Receivable, 111; Office Supplies, 121; Prepaid Insurance, 131; Furniture, 141; Building, 151; Land, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; Common Stock, 301; Dividends, 311; Service Revenue, 411; Salaries Expense, 511; Rent Expense, 521; and Utilities Expense, 531.
3. Post the journal entries to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Assume the journal entries were recorded on page 1 of the journal.
4. Prepare the trial bal.ance of Trevor Moore, Attorney, at April 30, 2017.

Deb Sikes started her practice as a design consultant on November I, 2017. During the first month of operations, the business completed the following transactions:

Nov. 1. Received $\$ 39.000$ cash and issued common stock to Sikes. 4. Purchased office supplies, $\$ 900$, and furniture, $\$ 1,800$, on account. Performed services for a law firm and received $\$ 2,000$ cash. 7. Paid $\$ 24,000$ cash to acquire land to be used in operations. 10. Performed services for a hotel and received its promise to pay the $\$ 1,200$ within one week. 14. Paid for the furniture purchased on November 4 on account. 15. Paid assistant's semimonthly salary, $\$ 1,410$. 17. Received cash on account, $\$ 1,000$. 20. Prepared a design for a school on account, $\$ 900$. 25. Received $\$ 2,100$ cash for design services to be performed in December. 28. Received $\$ 2,800$ cash for consulting with Plummer & Gordon. 29. Paid $\$ 1,080$ cash for a 12 -month insurance policy starting on December 1. 30. Paid assistant's semimonthly salary, $1,410. 30. Paid monthly rent expense,$\$800$. 30. Received a bill for utilities, $\$ 600$. The bill will be paid next month. 30. Paid cash dividends of $\$ 4,000$.

Requirements

1. Record each transaction in the journal using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Furniture; Land; Accounts Payable; Utilities Payable; Unearned Revenue; Common Srock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense. Explanations are nor required.
2. Open a T-account for each of the accounts.
3. Post the journal entries to the T-accounts, using transaction dares as posting references in the ledger accounts. Label the balance of each account Bal.
4. Prepare the trial balance of Deb Sikes, Designer, as of November 30, 2017.