Aduke Zhawaki is a talented musician who runs a business teaching music and playing in gigs with a variety of other musicians. Her business is operated as a proprietorship, under the name A to Z Music, which has a December 31 year end. On November 30, 2024, the company’s general ledger included the following accounts

December transactions were as follows:
Dec. 1 Paid December rent on her studio space, $475.

1 Purchased additional sound equipment for $3,500 from a friend who was going back to school to study accounting. The equipment was probably worth $5,000, but the friend needed the cash for tuition and was anxious to sell it. Paid $1,500 cash and promised to pay the remaining amount by December 5.

3 Borrowed $2,500 cash from her parents and signed a note payable.

4 Paid her friend the remaining amount owing on the December 1 transaction.

4 Collected $1,800 from customers in payment of their accounts.

7 Paid the $310 monthly insurance premium.

8 Paid for $150 of supplies.

10 Paid $2,130 of the accounts payable from November.

15 Gave musical performances at two recitals, therefore providing services of $825. The
customers had paid her in November. In November, Aduke had recorded the $825
received in advance as a liability, Unearned Revenue. By performing at the recitals, she
has “paid” this obligation.)

20 Received $3,300 cash from students for music lessons provided in December.

21 Paid her monthly telephone bill of $135.

22 Billed customers $2,250 for providing music at several holiday parties.

24 Withdrew $3,000 for personal use.

29 Received $525 cash advance from a customer for a performance in January.

30 Paid travel expenses of $695 for December in cash.

31 Paid her parents $210. Of this amount, $10 is interest and the remainder is a principal payment on the note payable.

Instructions

a. Using T accounts, enter the November 30 balances in the ledger accounts.

b. Journalize the December transactions.

c. Post the December journal entries to the T accounts. Add new accounts if needed.

d. Prepare a trial balance at December 31, 2024.

Taking It Further

Comment on A to Z Music’s cash balance at December 31, 2024. What concerns and suggestions do you have for Aduke to consider in January?

Transcribed Image Text:

A. Zhawaki, capital A. Zhawaki, drawings Accounts payable Accounts receivable Cash Equipment Insurance expense $19,500 31,350 4,235 2,200 2,965 17,500 3,410 Rent expense Service revenue Supplies Telephone expense Travel expense Unearned revenue $ 5,225 47,075 1,450 1,485 6,050 825