[sudarshan ranaw]

Complete the following problem.
Bill Jacobs set up his own domestic painting business on June 1 2014. The following transactions occurred during June;
June 1 -Bill invested $3400 into his business via a deposit into the business bank account June2 - Bill bought a spray painter for $2880 – this was purchased on credit. Bill expects the spray painter to work for 4 years after which it will be worn out.
June 3 - Bill bought paint for $60 paid for out of his bank account
June 6 – Bill completed his first paint job for a client, on credit for $300
June 8 – purchased $300 paint supplies for use on future jobs. Paid for by cheque. June 17 – Completed his first large paint job for $1600. Client paid in cash.
June 18 – Received $200 on account of the June 6 job.
Required
Set up T-accounts
Journalise the transactions
Post journals to T-accounts
Prepare a trial balance as at June 30, 2014.

[pready]

Step 1, set up T accounts for all of your accounts, with the account name on top of the T. You will need to decide which accounts you will be using if the problem does not say what accounts you have. Debits will go on the left side of the T while Credits will be on the right side of the T. Now on to step 2.

Step 2. Journalize your transactions. There are only seven transactions and there will be only one debit and one credit entry for each transaction. For example the first transaction on Jun 1: Debit Cash for $3,400 and Credit Bill Jacobs, Capital for $3,400. After all transactions have been journalized you go to step 3.

Step 3. Post your journal entries to your T accounts. So for the first transaction you will post $3,400 on the left side of the T for the Cash account and $3,400 to the right side of the T for the Bill Jacobs, Capital account. Once you post all transactions to your T accounts you need to move on to step 4.

Step 4. Get your balances for your T accounts. This means add all of your debits to get a debit balance and add your credits to get a credit balance. If you have both debits and credits you will subtract your credits from your debits if your account has a normal debit balance (assets, expenses, dividends or drawings) and subtract your debits from your credits if your account has a normal credit balance (liabilities and owners equity. Revenues and unearned revenues). Once you have balances for all of your T accounts you are ready to move on to step 5.

Step 5. Prepare a Trial Balance. This is a listing of all of your accounts in 2 columns, one for debits and one for credits. At the bottom of the trial balance you will add all of your debit balances together to get a total debit balance and add all of your credits together to get a total credit balance. Note your total debit balance must equal your total credit balance.

This is a very simple and straightforward problem. The only thing is if the accounts are not given to you, you will have to decide what accounts you will need. The information provided in the Jun 2 transaction about the paint sprayer is provided to tell you that the paint sprayer will be an asset, which will be Plant, Property, and Equipment.