Iris Beck

[logistic_guy]

$\displaystyle \text{Iris Beck}$ is a licensed $\displaystyle \text{CPA}$. During the first month of operations of her business, the following events and transactions occurred.

May
$\displaystyle \bold{1}$ $\displaystyle \text{Beck}$ invested $\displaystyle \$ 20,000$ cash in her business.
$\displaystyle \bold{2}$ Hired a secretary-receptionist at a salary of $\displaystyle \$ 2,000$ per month.
$\displaystyle \bold{3}$ Purchased $\displaystyle \$ 2,500$ of supplies on account from $\displaystyle \text{Tinio Supply Company}$.
$\displaystyle \bold{7}$ Paid office rent of $\displaystyle \$ 900$ cash for the month.
$\displaystyle \bold{11}$ Completed a tax assignment and billed client $\displaystyle \$ 3,200$ for services performed.
$\displaystyle \bold{12}$ Received $\displaystyle \$ 3,500$ advance on a management consulting engagement.
$\displaystyle \bold{17}$ Received cash of $\displaystyle \$ 1,200$ for services performed for $\displaystyle \text{Misra Co}$.
$\displaystyle \bold{31}$ Paid secretary-receptionist $\displaystyle \$ 2,000$ salary for the month.
$\displaystyle \bold{31}$ Paid $\displaystyle 60\%$ of balance due $\displaystyle \text{Tinio Supply Company}$.

Instructions
$\displaystyle \bold{(a)}$ Journalize the transactions.
$\displaystyle \bold{(b)}$ Post to the ledger accounts.
$\displaystyle \bold{(c)}$ Prepare a trial balance on May $\displaystyle 31, 2017$.

 

[logistic_guy]

$\displaystyle \bold{1}$ $\displaystyle \text{Beck}$ invested $\displaystyle \$ 20,000$ cash in her business.

1​	Account​	Debit​	Credit​
	Cash​	20,000​	​
	Owner's Capital​	​	20,000​

 

[logistic_guy]

$\displaystyle \bold{2}$ Hired a secretary-receptionist at a salary of $\displaystyle \$ 2,000$ per month.

No journal entry is required

 

[logistic_guy]

$\displaystyle \bold{3}$ Purchased $\displaystyle \$ 2,500$ of supplies on account from $\displaystyle \text{Tinio Supply Company}$.

3​	Account​	Debit​	Credit​
	Supplies​	2,500​	​
	Accounts Payable​	​	2,500​

 

[logistic_guy]

$\displaystyle \bold{7}$ Paid office rent of $\displaystyle \$ 900$ cash for the month.

7​	Account​	Debit​	Credit​
	Rent Expense​	900​	​
	Cash​	​	900​

 

[logistic_guy]

$\displaystyle \bold{11}$ Completed a tax assignment and billed client $\displaystyle \$ 3,200$ for services performed.

11​	Account​	Debit​	Credit​
	Accounts Receivable​	3,200​	​
	Service Revenue​	​	3,200​

 

[logistic_guy]

$\displaystyle \bold{12}$ Received $\displaystyle \$ 3,500$ advance on a management consulting engagement.

12​	Account​	Debit​	Credit​
	Cash​	3,500​	​
	Unearned Service Revenue​	​	3,500​

 

[logistic_guy]

$\displaystyle \bold{17}$ Received cash of $\displaystyle \$ 1,200$ for services performed for $\displaystyle \text{Misra Co}$.

17​	Account​	Debit​	Credit​
	Cash​	1,200​	​
	Service Revenue​	​	1,200​

 

[logistic_guy]

$\displaystyle \bold{31}$ Paid secretary-receptionist $\displaystyle \$ 2,000$ salary for the month.

31​	Account​	Debit​	Credit​
	Salaries and Wages Expense​	2,000​	​
	Cash​	​	2,000​

 

[logistic_guy]

$\displaystyle \bold{31}$ Paid $\displaystyle 60\%$ of balance due $\displaystyle \text{Tinio Supply Company}$.

31​	Account​	Debit​	Credit​
	Accounts Payable​	1,500​	​
	Cash​	​	1,500​

 

[logistic_guy]

$\displaystyle \bold{(b)}$

Cash Ledger​

Date​	Explanation​	Debit​	Credit​	Balance​
May 1​	Initial Investment​	20,000​	​	20,000​
7​	Rent Payment​	​	900​	19,100​
12​	Cash Advance Received​	3,500​	​	22,600​
17​	Cash from Services​	1,200​	​	23,800​
31​	Salary Payment​	​	2,000​	21,800​
31​	Payment to Supplier​	​	1,500​	20,300​