Accounting English (part7).pptVIP

Question 4 Latt Company informs you that the following business transactions occurred in 2003: May 1 Jay Latt transferred $15,000 cash from a personal bank account and equipment with a value of $4,000 to his business. 1 A building costing 39,000 and land costing 20,000 were purchased. Cash in the amount of $5,000 was paid and a mortgage note was given for the remainder. Question 4 2 Premiums for property insurance were paid in the amount of $1,500 for May. 3 Supplies costing $500 and equipment costing $6,000 were purchased on account. 15 Cash received for professional services performed, $5,600; other clients were billed for services in the amount of $2,430. 16 Paid cash to creditors on account, $1,800. Question 4 20 Returned portion of the supplies costing $240 since they were not of the proper grade. 22 Received $1,880 cash from clients on account. 31 Paid utility bill, $500. 31 Paid monthly salaries, $3,000. 31 Recorded additional amount owed by clients for services performed in May, $4,900; payment is due within 30 days. Question 4 A. Open three-column ledger accounts for Latt Company using the following accounts: Cash, 101; Accounts Receivable, 102; Supplies on Hand, 103; Equipment, 106; Building, 107; Land, 108; Accounts payable, 201; Mortgage Note Payable, 205; Jay Latt, Capital, 301; Revenue from services,302; Salary Expense, 305; Utilities Expense, 307; Insurance Expense, 309. Record the above transactions in a general journal. (Omit explanations) Question 4 B. Post the journal entries to the ledger accounts. (Omit explanations) C. Prepare a trial balance as of May 31, 2003. D. Determine the following: (1) Total revenue for the month (2) Total expenses for the month Trial balance Usually at the end of the accounting period, or before financial statements are prepared, a trial balance is made to test the equality of the debit balances and credit balances of the ledger accounts. Trial balance A trial balance is a listing of all ledger ac