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ACT 201 Chapter 2 (Journal, Ledger & Trial Balance - Practice Problem Solution)

John Kent invested $25,000 cash into his business. Throughout the month he paid expenses such as rent, salaries, and supplies. He also completed work for clients and received payment. On May 31st he paid down his accounts payable and prepared a trial balance showing his assets, liabilities, equity, revenues and expenses for the month.

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MD SHAFIN AHMED
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155 views7 pages

ACT 201 Chapter 2 (Journal, Ledger & Trial Balance - Practice Problem Solution)

John Kent invested $25,000 cash into his business. Throughout the month he paid expenses such as rent, salaries, and supplies. He also completed work for clients and received payment. On May 31st he paid down his accounts payable and prepared a trial balance showing his assets, liabilities, equity, revenues and expenses for the month.

Uploaded by

MD SHAFIN AHMED
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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John Kent is a licensed CPA.

During the first month of operations of his business, the following events and transactio

1st May Kent invested $25,000 cash.

2nd May Hired a secretary-receptionist at a salary of $2,000 per month

3rd May Purchased $2,500 of supplies on account from Read Supply Company

7th May Paid office rent of $900 cash for the month

11th May Completed a tax assignment and billed client $2,100 for services provided

12th May Received $3,500 advance on a management consulting engagement

17th May Received cash of $1,200 for services completed for H. Arnold Co

31st May Paid secretary-receptionist $2,000 salary for the month

31st May Paid 40% of balance due Read Supply Company

Instruction

a) Journalize the transactions


b) Post to the ledger accounts
c) Prepare a trial balance on May 31, 2010
ollowing events and transactions occurred.
Journal Entries
Date Account titles & Explanation Ref Debit Credit

1st May Cash 25000


John Kent Capital 25000

2nd May No Entry

3rd May Supplies 2500


Accounts Payable 2500

7th May Rent Expense 900


Cash 900

11th May Accounts receivable 2100


Service Revenue 2100

12th May Cash 3500


Unearned Revenue 3500

17th May Cash 1200


Service Revenue 1200

31st May Salaries Expense 2000


Cash 2000

31st May Accounts Payable 1000


Cash 1000
Cash
Date Explanation Ref Debit Credit Balance
1st May 25000 25000
7th May 900 24100
12th May 3500 27600
17th May 1200 28800
31st May 2000 26800
31st May 1000 25800

Accounts Payable
Date Explanation Ref Debit Credit Balance
3rd May 2500 2500
31st May 1000 1500

John Kent Capital


Date Explanation Ref Debit Credit Balance
1st May 25000 25000

Salaries Expense
Date Explanation Ref Debit Credit Balance
31st May 2000 2000
Accounts Receivable
Date Explanation Ref Debit Credit Balance
11th May 2100 2100

Supplies
Date Explanation Ref Debit Credit Balance
3rd may 2500 2500

Unearned Revenue
Date Explanation Ref Debit Credit Balance
12th May 3500 3500

Service Revenue
Date Explanation Ref Debit Credit Balance
11th May 2100 2100
17th May 1200 3300

Rent Expense
Date Explanation Ref Debit Credit Balance
7th May 900 900
John Kent CPA
Trial Balance
31st May 2010

Cash
Accounts Receivable
Supplies
Accounts Payable
Unearned Revenue
John Kent, Capital
Service Revenue
Salaries Expense
Rent Expense
CPA
nce
010
Debit Credit
25800
2100
2500
1500
3500
25000
3300
2000
900
33300 33300

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