 |
Prepare general journal entries for the following transactions of a new business called Pose for Pics.
Aug. 1 Hashim Paris, the owner, invested $7,500 cash and $32,500 of photography equipment in
The business.
1 Paid $3,000 cash for an insurance policy covering the next 24 months.
5 Purchased office supplies for $1,400 cash.
20 Received $2,650 cash in photography fees earned.
31 Paid $875 cash for August utilities.
Do your work first, then if you have a question we will try to help you.
These transactions need to be journalized. First you need to figure out what accounts are being affected and how they are affected. Is cash coming in, or going out?
Remember your debits must equal your credits.
Thank you very much.Quote:
Originally Posted by pready
A trial balance is a listing of all the counts and their ending balances, like as of the end of a month or end of a year. You see why you have to do the journal entries first? You don't put transactions directly into a trial balance.
[QUOTE=pready;1761057]Do your work first, then if you have a question we will try to help you.
These transactions need to be journalized. First you need to figure out what accounts are being affected and how they are affected. Is cash coming in, or going out?
Remember your debits must equal your credits.[/QUOTE
This is what I've done tried so far and have done but I'm not sure how to put it in a spreadsheet.
Owner invested Cash (Owner Capital): 7,500 Credit
Owner invested Equipment (Asset): 32,000 Debit
Prepaid Insurance (Expense); 3,000 credit
Office Supplies (Expense): 1,400 credit
Fees Received (revenue): 2,650 credit
Utilities (Expense): 875 credit
It doesn't specifically need to be on a spreadsheet. It just needs to be in journal form. Yes, you can put it on a spreadsheet, or on a columnar pad, or working papers that came with the book, or just a piece of notebook paper. Doesn't matter. This is what the format looks like:Quote:
This is what I've done tried so far and have done but I'm not sure how to put it in a spreadsheet.
Principles of Accounting Chapter 2
Oh wow. Sorry, but you're a little, um, lost. :) These aren't even journal entries. And miscategorizations, and nothing balances, and just all sorts of stuff. Not sure where to start. Big topic and no way to cover it all.Quote:
Owner invested Cash (Owner Capital): 7,500 Credit
Owner invested Equipment (Asset): 32,000 Debit
Prepaid Insurance (Expense); 3,000 credit
Office Supplies (Expense): 1,400 credit
Fees Received (revenue): 2,650 credit
Utilities (Expense): 875 credit
Just a couple of quick things, though. Cash isn't owner's capital. Cash is an asset and owner's capital is equity, which are two completely different kinds of accounts. Though it is a common mistake. (I think because people thinking of "raising capital" and equate that to cash, but that's misleading. Cash is quite literally what it says: cash. Equity is the net worth of the owner.)
Journal entries are account names, not descriptions. i.e. Equipment, not "owner invested equipment." So you call it the account name. If you want to describe the entry, that goes underneath the entry itself. (Note in the example above that I linked to.)
Prepaid insurance and supplies are both assets, not expenses.
Journal entries all have to have equal debits and credits. And there's lots of stuff going on here that isn't recorded. Like every time something is "paid," you have the cash account affected.
I'm just going to give you some links and let you start reading. I am going to admit up front I've never read this stuff -- I use these sites mostly for examples of statements and such. So I don't know how good the explanations are or anything:
Start here and you can skip down to where it says "Fundamental Accounting Equation" - you need to read these definitions.
Principles of Accounting Chapter 1
Debits & credits:
Debits and Credits | AccountingCoach.com
Principles of Accounting Chapter 2
| All times are GMT -7. The time now is 04:01 PM. |