Journal Entries and Trial Balance

On January 1, 20Y5, Fahad Ali established Mountain Top Realty, which completed the following transactions during the month:

1. Fahad Ali transferred cash from a personal bank account to an account to be used for the business, $30,000.
2. Paid rent on office and equipment for the month, $5,410.
3. Purchased supplies on account, $1,600.
4. Paid creditor on account, $590.
5. Earned fees, receiving cash, $24,600.
6. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $1,010.
7. Paid office salaries, $3,150.
8. Determined that the cost of supplies used was $890.
9. Withdrew cash for personal use, $1,450.

Required:

1. Journalize entries for transactions (a) through (i) (in chronological order), using the following account titles: Cash; Supplies; Accounts Payable; Fahad Ali, Capital; Fahad Ali, Drawing; Fees Earned; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. If an amount box does not require an entry, leave it blank.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to these T accounts, selecting the appropriate letter to the left of each amount to identify the transactions. Determine the account balances (when required), after all posting is complete, for all accounts having two or more debits or credits.

Cash

Supplies

Accounts payble

Fahad Ali, Capital

Fahad Ali, Drawing

Fees Earned

Rent Expense

Office Salaries Expense

Automobile Expense

Supplies Expense

Miscellaneous Expense

3. Prepare an unadjusted trial balance as of January 31, 20Y5. If an amount box does not require an entry, leave it blank.

4. As a result of the January transactions (a-i), determine the following:

a. Amount of total revenue recorded in the ledger.

b. Amount of total expenses recorded in the ledger.

c. Amount of net income for January.

5. Determine the total increase or decrease in owner's equity for January.