Accounting Trial Balance
Chapter 2, Illustrative Problem 1
Entries into T accounts and trial balance
Daphne Ebert, an interior design consultant, established a professional services corporation known as Daphne Designs, Inc. on August 1 of the current year. During the month, she opened an office and completed the following transactions connected with her professional practice:
a. Daphne deposited $32,500 drawn on her personal bank account to a business account opened under the name of Daphne’s Designs in exchange for Daphne Designs, Inc. capital stock.
b. Paid January rent for office and showroom, $3,600.
c. Purchased display cases, shelving, and other showroom equipment for $10,900, paying $3,000 cash and giving a non-interest-bearing note for the remainder.
d. Purchased office furniture on account, $7,800.
e. Paid cash for office supplies, $1,150.
f. Paid cash for insurance policies, $1,500.
g. Received cash from client for design services rendered, $3,700.
h. Paid cash for miscellaneous expenses (postage, car fare, lunch with clients), $120.
i. Paid cash to creditors on account, $2,400.
j. Paid installment due on note payable, $675.
k. Received invoice for drafting service, due in February, $420.
l. Recorded fee earned on design services rendered, payment to be received in February, $5,080.
m. Paid salary of assistant, $1,625.
n. Paid $195 for advertising in January.
Instructions
1. Record the foregoing transactions directly in the following T accounts, without journalizing: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Showroom Equipment; Office Furniture; Notes Payable; Accounts Payable; Capital Stock; Professional Fees; Rent Expense; Salary Expense; Advertising Expense; Drafting Expense; Miscellaneous Expense. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction.
2. Determine the balances of the T accounts having two or more debits or credits. A memorandum balance should be inserted in
Entries into T accounts and trial balance
Daphne Ebert, an interior design consultant, established a professional services corporation known as Daphne Designs, Inc. on August 1 of the current year. During the month, she opened an office and completed the following transactions connected with her professional practice:
a. Daphne deposited $32,500 drawn on her personal bank account to a business account opened under the name of Daphne’s Designs in exchange for Daphne Designs, Inc. capital stock.
b. Paid January rent for office and showroom, $3,600.
c. Purchased display cases, shelving, and other showroom equipment for $10,900, paying $3,000 cash and giving a non-interest-bearing note for the remainder.
d. Purchased office furniture on account, $7,800.
e. Paid cash for office supplies, $1,150.
f. Paid cash for insurance policies, $1,500.
g. Received cash from client for design services rendered, $3,700.
h. Paid cash for miscellaneous expenses (postage, car fare, lunch with clients), $120.
i. Paid cash to creditors on account, $2,400.
j. Paid installment due on note payable, $675.
k. Received invoice for drafting service, due in February, $420.
l. Recorded fee earned on design services rendered, payment to be received in February, $5,080.
m. Paid salary of assistant, $1,625.
n. Paid $195 for advertising in January.
Instructions
1. Record the foregoing transactions directly in the following T accounts, without journalizing: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Showroom Equipment; Office Furniture; Notes Payable; Accounts Payable; Capital Stock; Professional Fees; Rent Expense; Salary Expense; Advertising Expense; Drafting Expense; Miscellaneous Expense. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction.
2. Determine the balances of the T accounts having two or more debits or credits. A memorandum balance should be inserted in