Exercise(part2-3).docVIP

Exercise 1: 1. Jasmine Worthy started a haircutting business called Expression. The following events occurred during its first month. a. On August 1, Worthy invested $3000 cash and $15000 of equipment in Expressions. b. On August 2, Expressions paid $600 cash for furniture for the shop. c. On August 3, Expressions paid $500 to rent space in a strip mall for August. d. On August 4, it purchased $1200 of equipment on credit for the shop (using a not payable). e. On August 5, Expressions open for business. Cash received from haircutting services during the first half on August was $825. f. On August 15, it provided $100 of haircutting services but not received cash yet. g. On August 17, it received a $100 check for services previously rendered on account. h. On August 17, it paid $125 to an assistant for hours worked during the grand opening. i. Cash received from services provided during the second half on August was $930. j. On August 31, it paid a $400 installment toward principal on the note payable entered into on August 4. k. On August 31, Worthy withdrew $900 cash for personal use. Required: 1) Open the following ledger account in balance column format: Cash; Accounts Receivable； Furniture；Store Equipment；Note Payable；Paid-in Capital；Haircutting Services Revenue；Wages Expense；Rent Expense Prepare general journal entries for the following transactions 2) Post the journal entries from (1) to the ledger accounts (or T-account). 3) Prepare a trial balance as of August 31. 4) Prepare an income statement for August. 5) Prepare a Balance sheet as of August 31. Solution to Problem 1 1. General journal entries: GENERAL JOURNAL DATE ACCOUNT TITLES AND EXPLANATION P.R. DEBIT CREDIT Aug. 1 Cash 3 0 0 0 00 Store Equipment 1 5 0 0 0 00 Paid-in Capital 1 8 0 0 0 00 2 Furniture 6 0 0 00 Cash 6 0 0 00 3 Rent Expenses 5 0 0 00 Cash 5 0 0 00