219. On November 12th NetSolutions provides $1,900.00 in services to clients. At the time of service, the clients paid $500.00 in cash and put the balance on account.
(a)Journalize this event.
(b)On November 29th NetSolutions clients paid an additional $800.00 on their accounts due. Journalize this event.
(c)Calculate the amount on accounts receivable on November 30th.
220. Journalize the following selected transactions for August 2008 in a two-column journal. Journal entry explanations may be omitted.
Aug 1Received cash from the investment in exchange for capital stock, $15,000.
2Received cash for providing accounting services, $8,000.
3Billed customers on account for providing services, $4,000.
4Paid advertising expense, $400.
5Received cash from customers on account, $3,500.
6Dividends paid, $1,000
7Received telephone bill, $100
8Paid telephone bill, $100.
Date
Description
Post Ref
Debit
Credit
221. Analyze the following transactions as to their effect on the accounting equation.
(a)The company paid $225 to a vendor for supplies purchased previously on account.
(b)The company performed $1,050 of services and billed the customer.
(c)The company received a utility bill for $195 and will pay it next month.
(d)The stockholders were paid cash dividends of $50.
(e)The company paid $305 in salaries to its employees.
(f)The company collected $725 of cash from its customers on account.
Some of the possible effects of a transaction on the accounting equation are listed below:
(1)Asset, dr.; Asset, cr.
(2)Asset, dr.; Stockholders’ Equity, cr.
(3)Asset, dr.; Liability, cr.
(4)Asset, dr.; Revenue, cr.
(5)Liability, dr.; Assets, cr.
(6)Dividends, dr.; Asset, cr.
(7)Expense, dr.; Assets, cr.
(8)Expense, dr.; Liability, cr.
Put the appropriate letter next to each transaction.
222. Set up T accounts for Cash; Accounts Receivable; Supplies; Accounts Payable; Capital Stock; Dividends; Professional Fees; and Operating Expenses.
(a)In the T accounts, record the following transactions of Wells Consultant Services for May, 2007, identifying each entry by number:
(1)Wells invested $12,000 cash in the business in exchange for capital stock.
(2)Purchased supplies on account, $5,750.
(3)Paid operating expenses, $5,000.
(4)Billed clients for fees, $6,940.
(5)Received cash from cash clients, $4,200.
(6)Paid creditors on account, $1,000.
(7)Received $2,600 from clients on account.
(8)Paid cash dividends $1,000.
(b)Prepare a trial balance as of May 31, 2007 for Wells Consultant Services.
(c)Assuming that supplies expense (which has not been recorded) amounts to $1,000 for May, determine the following:
(1)Net income for the month.
(2)Stockholders’ equity as of May 31.
(a)
Cash
Capital Stock
(1)
12,000
(3)
5,000
(1)
12,000
(5)
4,200
(6)
1,000
(7)
2,600
(8)
1,000
Accounts Receivable
Dividends
(4)
6,940
(7)
2,600
(8)
1,000
Supplies
Professional Fees
(2)
5,750
(4)
6,940
(5)
4,200
Accounts Payable
Operating Expenses
(6)
1,000
(2)
5,750
(3)
5,000
(b)
Wells Consultant ServicesTrial BalanceMay 31, 2007
Cash11,800
Accounts Receivable4,340
Supplies5,750
Accounts Payable 4,750
Capital Stock 12,000
Dividends1,000
Professional Fees 11,140
Operating Expenses 5,000
27,890 27,890
223. Prepare a trial balance, listing the following accounts in proper sequence. The accounts (all normal balances) were taken from the ledger of Jilson Consultants on June 30, 2008.
Accounts Payable$ 2,100 Rent Expense$10,500
Accounts Receivable1,450 Salary Expense13,000
Cash5,375 Fees Earned46,600
Capital Stock15,800 Supplies1,125
Dividends13,500 Supplies Expense1,400
Equipment13,500 Utilities Expense4,400
Miscellaneous Expense250
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