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You have reached the end of the first section of this book, The following problem is designed to review and reinforce your knowledge of accounting for a service business. Jim Arnold has been a photographer since his graduacion from high school several years ago. On July 1, 20X1, he decided to open his own photography firm, called Armold's Photos. To start his accounting system, Jim developed the chart of accounts shown below. Arnold's Photos Chart of Accounts Assets Owmer's Equity 311 111 Cash Jim Arnold, Capital Accounts Receivable Office Supplies Photography Supplies Piepald Insurance Office Equipment 121.1 Accumulated Depreciation-0ffice Equipment 122 Photography Equipment 122.1 Accumulated Depreciation Photography Equipment 123 Furniture and Fixtures 123.1 Accumulated Depreciation Furniture and Fixtures 112 312 Jim Arnold, Drawing Income Summary 113 313 114 Revenue 115 Photography Revenue 412 Veniding Machine Revenue 411 121 Expenses 511 Salaries Expense 512 Advertising Expense Rent Expense Repairs Expense 513 514 515 insurance Expense office Supplies Expense 517 Photography Supplies Expense 518 Depreciation Expense-Dffice Equipment 519 Deprociation Expenise-Photography Equipment 520 Depreciation Expense-Furniture and Fxtures 516 Liabilities Accounts Payable 212 Notes Payable 213 Salaries Payable 211 Utilities Expense Miscelaneous Expense 521 522 Jim completed the fullowing transuctions during the firsr month of operations: 20X1 urvalund ar S20.000 in Jim completed the fulkowing transactions during the first month of operations: 20X1 Jul. 1 Jim invested $40,000 cash and photography cquipment valued at $20,000 in the business. 1 Purchased office supplies for cash, $1,300. 1 Purchased photography supplies on account, $6,700, 1 Paid July rent, $1,700. 1 Paid for a newspaper ad, $500. 2 Purchased office equipment on account, $6,750. 2 Paid properry insurance for the upcoming year, $3,600. 3 Purchased a computer systein and software, $3,200, by issuing a note payable. 5 Paid for promotional handouts, $150. 6 Paid miscellancous expenses, $ 175. 7 Paid salaries of employees, $1.400. 7 Recurded week's cash receipts for photo work, $1,350. Jul. 8 Paid for carpet deaning (a miscellaneous expense), $75. 9 Recorded photo work done for a customer on account, $855. 9 Purchased additional photography supplies on account, $3,200. 10 Purchased additional photography equipinent for cash, $3,500. 10 Entered into a contract with Southside Food Vendors to place vending machines in the waiting room. Jim is to reccive 10% of all sales, with a minimum of $200 monthly. Received $200 as an advance payment. 11 Purchased furniture for the lobby area, $1,700. Paid cash in full, 12 Paid cash for the installation of overhead lighting fixtures, $900, 15 Recorded sccond week's cash receipts for photo work, $2.170. 15 Paid weekly salaries. $1,400. 17 Jim withdrew cash for personal use, $800. 18 Paid for TV ud. $710. 19 Paid for repair to equipiment, $80. 19 Collected $500 for the plhoto work done uts account on July 9. 22 Recorded third week's cash receipts for photo work, $2,045. 22 Paid weekly salaries, $1,400. 23 Did a special wedding photo session for a customer on credit, $550. 28 Recorded fourch week's cash receipis for photo work, $1.995. 29 Paid salaries of employees, $t.400. 30 Paid water bill for July, $75. 30 Paid electric bill for July, $1.095. 31 Made a $500 payment on the note for the computer purchased on July 3. 31 Made a payrment for the offic equipment purchased on account, $2.000. 31 Made a payment on the photograplhy supplies purchased un account, $1.000. 31 Wrote a business check to pay for Jin's home phone bill, $310. 31 Southside Food Vendors reported a total of $2.800 of vending imachine sales fur July. Ten percent of these sales is $280. Since $200 had already been recived and recorded in July. lim was owed S8O. Received he $80 check. Directions: 1. Open an 2ccount in the ledger for cach account shown in the chart of accounts. 2. Journalize cach of the transactions for fuly, beginning on page 1 of the general journal. 3. Post the journal entries to the ledger. 4. Prepare a trial balance of the ledger in the first two columns of a 10-column wark sheet. 5. Coimplete the 10-column work sheet. Assume for the purposes of this problem that Jim has a one mohth accounring period. Data for adjustments are as follows: fa) Office supplies on hand. $85U. (b) Photugraplıy supplies on liand. $5,550. () insurance expired, $300. (d) Salaries unpaid, two days of a five-day week; wcekly salaties are S1,400. fe) Depreciation of office equlpment, $190. (6 Depreciation of photography equipment, $275. (e) Depreciation of furniture and fixrures, $75. 6. Prepare an incune statement for the monh ended July 31. 7. Preparc a statement of uwner's cquity for the monch ended July 31. 8. Prepare a balance sheer as of July 31. 9. Journalize adjusting encries from dhe completed work sheet. 10. Journalue closing entries. 11. Post adjusting and closing entries to the ledget. 12. Prepare a post-cloying trial balance. Jim Arnold's Photography Studio Pa 2. General Journal P.R. Debit Credit Date Account Title 17.201 2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 lim Amold, Capital ACCOUNT ACCOUNT HO. ALA DATE TEM DEBIT CREDIT DENY O Paradigm Publishing, Inc. Comprehensive Review Problem Add header ACCOUNT Jim Arnold, Drawing ACCOUNTNO. BALA DATE TEM PR CREDIT DENT ACCOUNT Income Summary ACCOUNT NO. BAU DATE ITEM DENE CHET ACCOUNT Photography Revanue ADUNTN BALA DAE PR 11 Jim Armold Part 2 Jim Arnold Purtu Nin Anoid Part4 Jim Ar Salarles Expense ACCOUNT NO. ACCOUNT BALA PR DEIT CREDIT DAN DERIT 2003 O Paradigm Publishing, Inc. Comprehensive Review Problem Parti Add header Advertising Expense ACCOUNT NO. ACCOUNT BALA DATE ITEM P.R. DEBIT CREDIT DEBIT 20x ACCOUNT NO. ACCOUNT Rent Expense BALA DATE TEM PR. DEBIT CREDT DEBIT ACCOUNT Repairs Expense ACCOUNT NO. BALA DEBIT Depreciation Expense-Photography Equipment ACCOUNT ACCOUNT NO. BALA DATE ITEM PR. DEBIT CREDIT DEBIT 20 Al. Depreciation Expense-Furniture and Fixtures ACCOUNT ACCOUNT NO, BALA DATE ITEM PR. DEBIT CREDIT DEBIT ACCOUNT Utilities Expense ACCOUNT NO. BALA DATE ITEM P.R. DEBIT CREDIT DEBIT ACCOUNT Miscellaneous Expense ACCOUNT NO. BALA DATE ITEM PR DEBIT CREDIT DEBIT 201 Arnold's Photos Work Sheet For Month Ended Jufy 31, 20X1 THe Rstence Adistments Adusted Tr Rstce Account Te menme Statemmt Batance Sheet Debt Cred Dehit Credi Deha Credit Deb Credit Debe Ceit 22,570 27,570 im Armeld Pad t Arnold's Photos Income Statement For Month Ended July 31, 20X1 7. Arnold's Photos Statement of Owner's Equity For Month Ended July 31, 20X1 Add header Arnold's Photos Balance Sheet July 31, 20X1 Assets Arnold's Photos Post-Closing Trial Balance July 31, 20X1 ACCOUNT TITLE DEBIT CREDIT You have reached the end of the first section of this book, The following problem is designed to review and reinforce your knowledge of accounting for a service business. Jim Arnold has been a photographer since his graduacion from high school several years ago. On July 1, 20X1, he decided to open his own photography firm, called Armold's Photos. To start his accounting system, Jim developed the chart of accounts shown below. Arnold's Photos Chart of Accounts Assets Owmer's Equity 311 111 Cash Jim Arnold, Capital Accounts Receivable Office Supplies Photography Supplies Piepald Insurance Office Equipment 121.1 Accumulated Depreciation-0ffice Equipment 122 Photography Equipment 122.1 Accumulated Depreciation Photography Equipment 123 Furniture and Fixtures 123.1 Accumulated Depreciation Furniture and Fixtures 112 312 Jim Arnold, Drawing Income Summary 113 313 114 Revenue 115 Photography Revenue 412 Veniding Machine Revenue 411 121 Expenses 511 Salaries Expense 512 Advertising Expense Rent Expense Repairs Expense 513 514 515 insurance Expense office Supplies Expense 517 Photography Supplies Expense 518 Depreciation Expense-Dffice Equipment 519 Deprociation Expenise-Photography Equipment 520 Depreciation Expense-Furniture and Fxtures 516 Liabilities Accounts Payable 212 Notes Payable 213 Salaries Payable 211 Utilities Expense Miscelaneous Expense 521 522 Jim completed the fullowing transuctions during the firsr month of operations: 20X1 urvalund ar S20.000 in Jim completed the fulkowing transactions during the first month of operations: 20X1 Jul. 1 Jim invested $40,000 cash and photography cquipment valued at $20,000 in the business. 1 Purchased office supplies for cash, $1,300. 1 Purchased photography supplies on account, $6,700, 1 Paid July rent, $1,700. 1 Paid for a newspaper ad, $500. 2 Purchased office equipment on account, $6,750. 2 Paid properry insurance for the upcoming year, $3,600. 3 Purchased a computer systein and software, $3,200, by issuing a note payable. 5 Paid for promotional handouts, $150. 6 Paid miscellancous expenses, $ 175. 7 Paid salaries of employees, $1.400. 7 Recurded week's cash receipts for photo work, $1,350. Jul. 8 Paid for carpet deaning (a miscellaneous expense), $75. 9 Recorded photo work done for a customer on account, $855. 9 Purchased additional photography supplies on account, $3,200. 10 Purchased additional photography equipinent for cash, $3,500. 10 Entered into a contract with Southside Food Vendors to place vending machines in the waiting room. Jim is to reccive 10% of all sales, with a minimum of $200 monthly. Received $200 as an advance payment. 11 Purchased furniture for the lobby area, $1,700. Paid cash in full, 12 Paid cash for the installation of overhead lighting fixtures, $900, 15 Recorded sccond week's cash receipts for photo work, $2.170. 15 Paid weekly salaries. $1,400. 17 Jim withdrew cash for personal use, $800. 18 Paid for TV ud. $710. 19 Paid for repair to equipiment, $80. 19 Collected $500 for the plhoto work done uts account on July 9. 22 Recorded third week's cash receipts for photo work, $2,045. 22 Paid weekly salaries, $1,400. 23 Did a special wedding photo session for a customer on credit, $550. 28 Recorded fourch week's cash receipis for photo work, $1.995. 29 Paid salaries of employees, $t.400. 30 Paid water bill for July, $75. 30 Paid electric bill for July, $1.095. 31 Made a $500 payment on the note for the computer purchased on July 3. 31 Made a payrment for the offic equipment purchased on account, $2.000. 31 Made a payment on the photograplhy supplies purchased un account, $1.000. 31 Wrote a business check to pay for Jin's home phone bill, $310. 31 Southside Food Vendors reported a total of $2.800 of vending imachine sales fur July. Ten percent of these sales is $280. Since $200 had already been recived and recorded in July. lim was owed S8O. Received he $80 check. Directions: 1. Open an 2ccount in the ledger for cach account shown in the chart of accounts. 2. Journalize cach of the transactions for fuly, beginning on page 1 of the general journal. 3. Post the journal entries to the ledger. 4. Prepare a trial balance of the ledger in the first two columns of a 10-column wark sheet. 5. Coimplete the 10-column work sheet. Assume for the purposes of this problem that Jim has a one mohth accounring period. Data for adjustments are as follows: fa) Office supplies on hand. $85U. (b) Photugraplıy supplies on liand. $5,550. () insurance expired, $300. (d) Salaries unpaid, two days of a five-day week; wcekly salaties are S1,400. fe) Depreciation of office equlpment, $190. (6 Depreciation of photography equipment, $275. (e) Depreciation of furniture and fixrures, $75. 6. Prepare an incune statement for the monh ended July 31. 7. Preparc a statement of uwner's cquity for the monch ended July 31. 8. Prepare a balance sheer as of July 31. 9. Journalize adjusting encries from dhe completed work sheet. 10. Journalue closing entries. 11. Post adjusting and closing entries to the ledget. 12. Prepare a post-cloying trial balance. Jim Arnold's Photography Studio Pa 2. General Journal P.R. Debit Credit Date Account Title 17.201 2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 lim Amold, Capital ACCOUNT ACCOUNT HO. ALA DATE TEM DEBIT CREDIT DENY O Paradigm Publishing, Inc. Comprehensive Review Problem Add header ACCOUNT Jim Arnold, Drawing ACCOUNTNO. BALA DATE TEM PR CREDIT DENT ACCOUNT Income Summary ACCOUNT NO. BAU DATE ITEM DENE CHET ACCOUNT Photography Revanue ADUNTN BALA DAE PR 11 Jim Armold Part 2 Jim Arnold Purtu Nin Anoid Part4 Jim Ar Salarles Expense ACCOUNT NO. ACCOUNT BALA PR DEIT CREDIT DAN DERIT 2003 O Paradigm Publishing, Inc. Comprehensive Review Problem Parti Add header Advertising Expense ACCOUNT NO. ACCOUNT BALA DATE ITEM P.R. DEBIT CREDIT DEBIT 20x ACCOUNT NO. ACCOUNT Rent Expense BALA DATE TEM PR. DEBIT CREDT DEBIT ACCOUNT Repairs Expense ACCOUNT NO. BALA DEBIT Depreciation Expense-Photography Equipment ACCOUNT ACCOUNT NO. BALA DATE ITEM PR. DEBIT CREDIT DEBIT 20 Al. Depreciation Expense-Furniture and Fixtures ACCOUNT ACCOUNT NO, BALA DATE ITEM PR. DEBIT CREDIT DEBIT ACCOUNT Utilities Expense ACCOUNT NO. BALA DATE ITEM P.R. DEBIT CREDIT DEBIT ACCOUNT Miscellaneous Expense ACCOUNT NO. BALA DATE ITEM PR DEBIT CREDIT DEBIT 201 Arnold's Photos Work Sheet For Month Ended Jufy 31, 20X1 THe Rstence Adistments Adusted Tr Rstce Account Te menme Statemmt Batance Sheet Debt Cred Dehit Credi Deha Credit Deb Credit Debe Ceit 22,570 27,570 im Armeld Pad t Arnold's Photos Income Statement For Month Ended July 31, 20X1 7. Arnold's Photos Statement of Owner's Equity For Month Ended July 31, 20X1 Add header Arnold's Photos Balance Sheet July 31, 20X1 Assets Arnold's Photos Post-Closing Trial Balance July 31, 20X1 ACCOUNT TITLE DEBIT CREDIT
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Answer rating: 100% (QA)
Date Account Title Debit Credit 20X1 1Jul Cash 40000 Photography Equipment 20000 Jim Arnold Capital 60000 Office Supplies 1300 Cash 1300 Photography Supplies 6700 Accounts payable 6700 Rent Expense 17... View the full answer
Related Book For
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
Posted Date:
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