Instructions
Please complete the following:
· Exercise 3.10
· Problem 3.3A
Remember to show all calculations. If you do not show how you a
ived at your answers, no credit will be received
General Instructions for Written Assignments
Please only submit one Excel file with all problems included. Submit an Excel file, please put one problem on a separate worksheet within one file. Please add my name as thowner of the Excel file once you are finished
· Exercise 3.10
Journalizing, Posting, and Preparing a Trial Balance
Janet Enterprises incorporated on May 3, cu
ent year. The company engaged in the following transactions during its first month of operations.
May 3 Issued capital stock in exchange for $950,000 cash.
May 4 Paid May office rent expense of $1,800.
May 5 Purchased office supplies for $600 cash. The supplies will last for several months.
May 15 Purchased office equipment for $12,400 on account. The entire amount is due June 15.
May 18 Purchased a company car for $45,000. Paid $15,000 cash and issued a note payable for the remaining amount owed.
May 20 Billed clients $120,000 on account.
May 26 Declared an $8,000 dividend. The entire amount will be distributed to shareholders on June 26.
May 29 Paid May utilities of $500.
May 30 Received $90,000 from clients billed on May 20.
May 31 Recorded and paid salary expense of $32,000.
A partial list of the account titles used by the company includes the following.
Cash Dividends Payable
Accounts Receivable Dividends
Office Supplies XXXXXXXXXXCapital Stock
Office Equipment XXXXXXXXXXClient Revenue
Vehicles XXXXXXXXXXOffice Rent Expense
Notes Payable XXXXXXXXXXSalary Expense
Accounts Payable XXXXXXXXXXUtilities Expense
a. Prepare journal entries, including explanations, for these transactions.
. Post each entry to the appropriate ledger accounts (use the T account format).
c. Prepare a trial balance dated May 31, cu
ent year. Assume accounts with zero balances are not included in the trial balance.
· Problem 3.3A
Analyzing and Journalizing Transactions
Environmental Services, Inc., performs various tests on wells and septic systems. A few of the company’s business transactions occu
ing during August are described as follows.
1. On August 1, the company billed customers $2,500 on account for services rendered. Customers are required to make full payment within 30 days. (Environmental Services uses an account entitled Testing Service Revenue when billing customers.)
2. On August 3, the company purchased testing supplies costing $3,800, paying $800 cash and charging the remainder on the company’s 30-day account at Penn Chemicals. The testing supplies are expected to last several months.
3. On August 5, the company returned to Penn Chemicals $100 of testing supplies that were not needed. The return of these supplies reduced by $100 the amount owed to Penn Chemicals.
4. On August 17, the company issued an additional 2,500 shares of capital stock at $8 per share. The cash raised will be used to purchase new testing equipment in September.
5. On August 22, the company received $600 cash from customers it had billed on August 1.
6. On August 29, the company paid its outstanding account payable to Penn Chemicals.
7. On August 30, a cash dividend totaling $6,800 was declared and paid to the company’s stockholders.
Instructions
Prepare an analysis of each of these transactions. Transaction 1 serves as an example of the form of analysis to be used.
(a) The asset Accounts Receivable was increased. Increases in assets are recorded by debits. Debit Accounts Receivable $2,500.
(b) Revenue has been earned. Revenue increases owners’ equity. Increases in owners’ equity are recorded by credits. Credit Testing Service Revenue $2,500.
Prepare journal entries, including explanations, for these transactions.
How does the realization principle influence the manner in which the August 1 billing to customers is recorded in the accounting records?
How does the matching principle influence the manner in which the August 3 purchase of testing supplies is recorded in the accounting records?