On June 1, 20Y6, Hannah Ellis established an interior decorating business, Whitworth Designs. During the month, Hannah completed the following transactions related to the business:

June 1. Hannah transferred cash from a personal bank account to an account to be used for the business, $48,000.

1. Paid rent for period of June 1 to end of month, $6,510.

6. Purchased office equipment on account, $19,340.

8. Purchased a van for $39,100 paying $6,200 cash and giving a note payable for the remainder.

10. Purchased supplies for cash, $3,260.

12. Received cash for job completed, $16,730.

15. Paid annual premiums on property and casualty insurance, $4,940.

23. Recorded jobs completed on account and sent invoices to customers, $16,320.

24. Received an invoice for van expenses, to be paid in June, $2,060. June 29. Paid utilities expense, $4,250.

29. Paid miscellaneous expenses, $1,300.

30. Received cash from customers on account, $10,050.

30. Paid wages of employees, $6,950.

30. Paid creditor a portion of the amount owed for equipment purchased on June 6, $9,360.

30. Withdrew cash for personal use, $2,200.

Instructions
1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.

11 Cash

12 Accounts Receivable

13 Supplies

14 Prepaid Insurance

16 Equipment

18 Van

21 Notes Payable

22 Accounts Payable

31 Hannah Ellis, Capital

32 Hannah Ellis, Drawing

41 Fees Earned

51 Wages Expense

53 Rent Expense

54 Utilities Expense

55 Van Expense

59 Miscellaneous Expense

2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

3. Prepare an unadjusted trial balance for Eco-Centric Designs as of June 30, 20Y6.

4. Determine the excess of revenues over expenses for June.

5. Can you think of any reason why the amount determined in (4) might not be the net income for June?