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    Exercise 4 (Solution..)

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    mohamed.khayrt
    The document provides the journal entries and ledger accounts for transactions recorded by Tom Petty Company in October 2022. It records investments, purchases of land and equipment, expenses for supplies and insurance, revenues from services, wages paid, and a withdrawal by the owner. A trial balance is prepared showing total debits equaling total credits of $64,300.

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    Exercise 4 (Solution..)

    Uploaded by

    mohamed.khayrt
    33 views4 pages
    The document provides the journal entries and ledger accounts for transactions recorded by Tom Petty Company in October 2022. It records investments, purchases of land and equipment, expenses for supplies and insurance, revenues from services, wages paid, and a withdrawal by the owner. A trial balance is prepared showing total debits equaling total credits of $64,300.

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    The document provides the journal entries and ledger accounts for transactions recorded by Tom Petty Company in October 2022. It records investments, purchases of land and equipment, expenses for supplies and insurance, revenues from services, wages paid, and a withdrawal by the owner. A trial balance is prepared showing total debits equaling total credits of $64,300.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    33 views4 pages

    Exercise 4 (Solution..)

    Uploaded by

    mohamed.khayrt
    The document provides the journal entries and ledger accounts for transactions recorded by Tom Petty Company in October 2022. It records investments, purchases of land and equipment, expenses for supplies and insurance, revenues from services, wages paid, and a withdrawal by the owner. A trial balance is prepared showing total debits equaling total credits of $64,300.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    MBA Program

    Accounting Principles Course


    Exercise (4)
    SOLUTION

    Transactions for Tom Petty Company for the month of October 2022 are presented below.
    1 Invested $42,000 cash in the business.
    2 Purchased land costing $28,000 for cash.
    5 Purchased equipment costing $18,000 for $4,000 cash and the remainder on credit.
    10 Purchased supplies on account for $800.
    15 Paid $1,200 for a one-year insurance policy.
    20 Received $3,500 cash for services performed.
    25 Received $4,000 for services to be performed next month.
    30 Paid wages to employees for $2,800.
    31 Petty withdrew $2,300 cash from the business.

    Required:
    - Journalize the transactions
    - Post to the ledger accounts
    - Prepare a trial balance
    Journalizing the transactions
    Oct 1.
    Cash.................................................................... 42,000
    Owner’s Capital..........................................................42,000

    Oct 2
    Land......................................................................28,000
    Cash .......................................................................... 28,000

    Oct 5
    Equipment.............................................................18,000
    Cash........................................................................... 4,000
    Account Payable....................................................... 14,000

    Oct 10
    Supplies..................................................................800
    Accounts Payable .........................................................800

    Oct 15
    Prepaid Insurance................................................1,200
    Cash ..........................................................................1,200

    Oct 20
    Cash....................................................................3,500
    Services Revenue ......................................................3,500

    Oct 25
    Cash ................................................................. 4,000
    Unearned Service Revenue.........................................4,000

    Oct 30
    Wages Expense ................................................2,800
    Cash...........................................................................2,800

    Oct 31
    Owner’s Drawings ............................................ 2,300
    Cash...........................................................................2,300
    Posting transactions to ledger
    Cash
    1/10 42,000 2/10 28,000
    20/10 3,500 5/10 4,000
    25/10 4,000 15/10 1,200
    30/10 2,800
    31/10 2,300
    End. Bal. 11,200

    Owner’s Capital
    1/10 42,000
    End. Bal. 42,000

    Land
    2/10 28,000
    End. Bal. 28,000

    Equipment
    5/10 18,000
    End. Bal. 18,000

    Accounts Payable
    5/10 14,000
    10/10 800
    End. Bal. 14,800
    Supplies
    10/10 800
    End. Bal. 800

    Prepaid Insurance
    15/10 1,200
    End. Bal. 1,200

    Service Revenue
    20/10 3,500
    End. Bal. 3,500

    Unearned Service Revenue


    25/10 4,000
    End. Bal. 4,000
    Wages Expense
    30/10 2,800
    End. Bal. 2,800

    Owner’s Drawings
    31/10 2,300
    End. Bal. 2,300

    Trial Balance on October 31, 2022


    Tom Petty Company
    Trial Balance
    October 31, 2022
    Account Debit Credit
    Cash 11,200
    Supplies 800
    Prepaid Insurance 1,200
    Land 28,000
    Equipment 18,000
    Accounts Payable 14,800
    Unearned Service Revenue 4,000
    Owner’s Drawings 2,300
    Owner’s Capital 42,000
    Service Revenue 3,500
    Wages Expense 2,800
    Total 64,300 64,300

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