Chapter 2 Analyzing Transactions 87

On October 1, 2010, Cody Doerr established Banyan Realty, which completed the fol-lowing transactions during the month:

a. Cody Doerr transferred cash from a personal bank account to an account to be usedfor the business, $17,500.

b. Purchased supplies on account, $1,000.c. Earned sales commissions, receiving cash, $12,250.d. Paid rent on office and equipment for the month, $3,800.e. Paid creditor on account, $600.f. Withdrew cash for personal use, $3,000.g. Paid automobile expenses (including rental charge) for month, $1,500, and miscel-

laneous expenses, $400.h. Paid office salaries, $3,100.i. Determined that the cost of supplies used was $725.

Instructions1. Journalize entries for transactions (a) through (i), using the following account titles:

Cash; Supplies; Accounts Payable; Cody Doerr, Capital; Cody Doerr, Drawing;Sales Commissions; Rent Expense; Office Salaries Expense; Automobile Expense;Supplies Expense; Miscellaneous Expense. Journal entry explanations may beomitted.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to theseaccounts, placing the appropriate letter to the left of each amount to identify thetransactions. Determine the account balances, after all posting is complete. Accountscontaining only a single entry do not need a balance.

3. Prepare an unadjusted trial balance as of October 31, 2010.4. Determine the following:

a. Amount of total revenue recorded in the ledger.b. Amount of total expenses recorded in the ledger.c. Amount of net income for October.

PR 2-2AJournal entries andtrial balance

objs. 1, 2, 3, 4

4. c. $2,725

l. Paid salary of assistant, $1,600.m. Paid cash for miscellaneous expenses, $325.n. Paid installment due on note payable, $250.o. Paid gas, oil, and repairs on automobile for April, $400.

Instructions1. Record the above transactions directly in the following T accounts, without jour-

nalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles;Equipment; Notes Payable; Accounts Payable; Travis Fortney, Capital; ProfessionalFees; Rent Expense; Salary Expense; Blueprint Expense; Automobile Expense;Miscellaneous Expense. To the left of each amount entered in the accounts, placethe appropriate letter to identify the transaction.

2. Determine account balances of the T accounts. Accounts containing a single entryonly (such as Prepaid Insurance) do not need a balance.

3. Prepare an unadjusted trial balance for Travis Fortney, Architect, as of April 30, 2010.

On July 1, 2010, Jessie Halverson established an interior decorating business, PhotogenicDesigns. During the month, Jessie Halverson completed the following transactionsrelated to the business:

July 1. Jessie transferred cash from a personal bank account to an account to beused for the business, $18,000.

4. Paid rent for period of July 4 to end of month, $1,750.10. Purchased a truck for $15,000, paying $1,000 cash and giving a note payable

for the remainder.

PR 2-3AJournal entries andtrial balance

objs. 1, 2, 3, 4

3. Total of Creditcolumn: $53,400