I

NTRODUCTORY

F

INANCIAL

A

CCOUNTING

I

J.

QUESTION 6

(19 marks)

You are the accountant for a newly formed company called Creative Architects Corporation. The

following business transactions occurred during the month of May 2018:

1.

Received $80,000 from shareholders in payment for 10,000 common shares that the

corporation issued.

2.

Hired an administrative assistant who will receive a salary of $2,400 each month.

3.

Purchased land for $30,000 and a building for $100,000 and paid $40,000 in cash and

signed a bank loan for the balance.

4.

Purchased $600 of office supplies on account.

5.

A customer was invoiced (billed) $1,800 for services provided.

6.

Paid $350 as partial payment for the office supplies purchased in transaction 4 above.

7.

Paid $1,800 for a one-year insurance policy.

8.

Received $1,000 as partial payment for the services provided in transaction 5 above.

9.

Received and paid the telephone bill for the month for $250.

10.

Received a bill for $450 for advertising for the current month.

11.

Paid $4,000 cash for salaries.

12.

Declared and paid $2,500 cash dividends to shareholders.

13.

Received $3,000 from a customer for services to be provided next month.

14.

Received $1,500 from a customer for a blueprint prepared for them.

PART A

(15 marks)

REQUIRED:

Record the transactions for May 2018 in the general journal provided below.

Do not provide

explanations for each entry.

If no entry is required, indicate by placing No entry in the

account titles area. Please leave a blank line between each set of journal entries and in the

Date column, enter the transaction number.