On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs.

During the month, Kris completed the following transactions related to the business:

June 1. Kris transferred cash from a personal bank account to an account to be used

for the business, $35,000.

1. Paid rent for period of June 1 to end of month, $4,750.

6. Purchased office equipment on account, $14,100.

8. Purchased a van for $28,500 paying $4,500 cash and giving a note payable for

the remainder.

10. Purchased supplies for cash, $2,380.

12. Received cash for job completed, $12,200.

15. Paid annual premiums on property and casualty insurance, $3,600.

23. Recorded jobs completed on account and sent invoices to customers, $11,900.

24. Received an invoice for van expenses, to be paid in June, $1,500.

June 29. Paid utilities expense, $3,100.

29. Paid miscellaneous expenses, $950.

30. Received cash from customers on account, $7,330.

30. Paid wages of employees, $5,070.

30. Paid creditor a portion of the amount owed for equipment purchased on June 6, $6,825.

30. Withdrew cash for personal use, $1,600.

Instructions

1. Journalize each transaction in a two-column journal beginning on Page 1, 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.) Explanations may be omitted.

11 Cash………………………………….31 Kris Storey, Capital

12 Accounts Receivable…………………32 Kris Storey, Drawing

13 Supplies………………………………41 Fees Earned

14 Prepaid Insurance…………………….51 Wages Expense

16 Equipment……………………………53 Rent Expense

18 Van…………………………………...54 Utilities Expense

21 Notes Payable………………………...55 Van Expense

22 Accounts Payable…………………….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 Eco-Centric Designs as of June 30, 2019.

4. Determine the excess of revenues over expenses for June.

5. Can you think of any reason why the amount determined in (4) might not be the net income for June?