Question

On October 1, 20Y4, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct 1. Jay transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $18,000. Oct 4. Paid rent for the period of October 4 to the end of the month, $3,000. Oct 10. Purchased a used truck for $23,750, paying $3,750 cash and giving a note payable for the remainder. Oct 13. Purchased equipment on account, $10,500. Oct 14. Purchased supplies for cash, $2,100. Oct 15. Paid annual premiums on property and casualty insurance, $3,600. Oct 15. Received cash for a job completed, $8,950. Oct 21. Paid a creditor a portion of the amount owed for equipment purchased on October 13, $2,000. Oct 24. Recorded jobs completed on account and sent invoices to customers, $14,150. Oct 26. Received an invoice for truck expenses, to be paid in November, $700. Oct 27. Paid utilities expense, $2,240. Oct 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, 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 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Equipment 18 Truck 21 Notes Payable 22 Accounts Payable 31 Common Stock 33 Dividends 41 Fees Earned 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Truck Expense 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, 20Y4. 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?

On October 1, 20Y4, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:
Oct 1. Jay transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $18,000.
Oct 4. Paid rent for the period of October 4 to the end of the month, $3,000.
Oct 10. Purchased a used truck for $23,750, paying $3,750 cash and giving a note payable for the remainder.
Oct 13. Purchased equipment on account, $10,500.
Oct 14. Purchased supplies for cash, $2,100.
Oct 15. Paid annual premiums on property and casualty insurance, $3,600.
Oct 15. Received cash for a job completed, $8,950.
Oct 21. Paid a creditor a portion of the amount owed for equipment purchased on October 13, $2,000.
Oct 24. Recorded jobs completed on account and sent invoices to customers, $14,150.
Oct 26. Received an invoice for truck expenses, to be paid in November, $700.
Oct 27. Paid utilities expense, $2,240.
Oct 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, 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
12 Accounts Receivable
13 Supplies
14 Prepaid Insurance
16 Equipment
18 Truck
21 Notes Payable
22 Accounts Payable
31 Common Stock
33 Dividends
41 Fees Earned
51 Wages Expense
53 Rent Expense
54 Utilities Expense
55 Truck Expense
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, 20Y4.

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?

Added by Ashley R.