Lee Adkins is a portrait artist. The following schedule
represents Lee’s combined chart of accounts and trial balance as of May 31.
Lee Adkins, Capital
Lee Adkins, Drawing
The general ledger also revealed account no. 530, Legal and Accounting Expense. The following
transactions occurred during June: 6/2
Collected $3,000 on account from customers
Sold 25% of the equipment and supplies to a young artist for
Received a $300 invoice from the accountant for preparing last
quarter’s financial Statements.
Paid $1,900 to creditors on account.
Adkins withdrew $2,000 cash for personal use.
Billed a customer $3,000 for a portrait painted this month.
a. Record the necessary journal entries for June on page 2 of the company’s general journal. (See Exhibit
b. Open running balance ledger “T” accounts by entering account titles, account numbers, and May 31
balances. (See exhibit 2.3 and 2.4)
c. Post the journal entries to the “T” accounts.
d. trial balance as of June 30. (See exhibit 2.9)
7. Journal entry preparation.
On January 1 of the current year, Peter Houston invested $80,000
cash into his company MuniServ. The cash was obtained from an owner investment by Peter
Houston of $50,000 and a $30,000 bank loan. Shortly thereafter, the company acquired selected
assets of a bankrupt competitor. The acquisition included land ($10,000), a building ($40,000),
and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit
the remaining balance due of $15,000 (an account payable) by February 15.
During January, the company had additional cash outlays for the following items:
Purchases of store equipment
The January utility bill of $200 was received on January 31 and will be paid next month.
MuniServ rendered services to clients on account amounting to $9,400.
All customers have been
billed; by month end, $3,700 had been received in settlement of account balances.
Present journal entries that reflect MuniServ’s January transactions, including the
$80,000 raised from the owner investment and loan.
Compute the total debits, total credits, and ending balance that would be found in
the company’s Cash account.
Determine the amount that would be shown on the January 31 trial balance for Accounts
Payable. Is the balance a debit or a credit?