Journal entries and trial balance On October 1, 20Y4, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: October 1. Jay transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $18,000. October 4. Paid rent for period of October 4 to end of month, $3,000. October 10. Purchased a used truck for $23,750, paying $3,750 cash and giving a note payable for the remainder. October 13. Purchased equipment on account, $10,500. October 14. Purchased supplies for cash, $2,100. October 15. Paid annual premiums on property and casualty insurance, $3,600. October 15. Received cash for job completed, $8,950. Enter the following transactions on Page 2 of the two-column journal: October 21. Paid creditor a portion of the amount owed for equipment purchased on October 13, $2,000. October 24. Recorded jobs completed on account and sent invoices to customers, $14,150. October 26. Received an invoice for truck expenses, to be paid in November, $700. October 27. Paid utilities expense, $2,240. October 27. Paid miscellaneous expenses, $1,100. October 29. October 30. October 31. Received cash from customers on account, $7,600. Paid wages of employees, $4,800. Paid dividends, $3,500. Required: 1. Journalize and insert the Posting References for 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. If an amount box does not require an entry, leave it blank. 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Equipment 18 Truck 21 Notes Payable 22 Accounts Payable 33 Common Stock Dividends 41 Fees Earned 51 Wages Expense 53 Rent Expense SS 54 Utilities Expense 55 Truck Expense 59 Miscellaneous Expense General Journal Page 1 Date Description Post. Ref. Debit Credit 20Y4, October 1 Cash 27,600 X Common Stock 27,600 X October 4 Rent Expense 2,680 X Cash 2,680 X October 10 Truck 23,000 X Cash 2,000 X Notes Payable 21,000 X October 13 Equipment 10,760 X Accounts Payable 10,760 X October 11 Sunnlies 1.050 V October 10 Truck 23,000 X Cash 2,000 X Notes Payable 21,000 X October 13 Equipment 10,760 X Accounts Payable 10,760 X October 14 Supplies 1,850 X Cash 1,850 X October 15-Insurance Prepaid Insurance 4,140 X Cash 4,140 X October 15-Fees Cash 11,590 X Fees Earned 11,590 X General Journal Page 2 Date Description Post. Ref. Debit Credit 20Y4, October 21 Accounts Payable 3,840 X Cash 3,840 X October 24 Accounts Receivable 13,190 X Fees Earned 13,190 X October 26 Truck Expense 1,210 X Accounts Payable 1,210 X October 27-Utilities Utilities Expense 1,380 X Cash 1,380 X October 27-Misc. Miscellaneous Expense 500 X Cash 500 X October 27-Misc. Miscellaneous Expense 500 X Cash 500 X October 29 Cash 5,520 X Accounts Receivable 5,520 X October 30 Wages Expense 3,670 X Cash 3,670 X October 31 Dividends 3,060 X Cash 3,060 X 2. Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting amount box does not require an entry, leave it blank. General Ledger Account: Cash Account No. 11 Balance Balance Date Item Post. Ref. Debit Credit Debit Credit 20Y4, October 1 October 4 October 10 October 14 October 15 October 15 October 21 October 27 October 27 October 29 October 30 Account: Accounts Receivable Balance Date Item Post. Ref. Debit Credit Debit 20Y4, October 24 October 29 Account No. 12 Balance Credit Account Supplies Account No. 13 Balance Balance Date Item Post. Ref. Debit Credit Debit Credit 20Y4, October 14 Account: Prepaid Insurance Account No. 14 Balance Date Item Post. Ref. Debit Credit Debit Balance Credit 2014, October 15 Account Equipment Account No. 16 Balance Date Item Post. Ref. Debit Credit Debit 2014, October 13 Balance Credit Account: Truck Account No. 18 Balance Balance Date Item Post. Ref. Debit Credit Debit Credit 20Y4, October 10 Account: Notes Payable Balance Account No. 21 Balance Date Item Post. Ref. Debit Credit Debit Credit 20Y4, October 10 Account: Accounts Payable Account No. 22 Balance Date Item Post. Ref. Debit Credit Debit Balance Credit 2014, October 13 October 21 October 26 Account: Common Stock Balance Date Item Post. Ref. Debit Credit Debit 2014, October 1 Account No. 31 Balance Credit Account: Dividends Account No. 33 Balance Date Item Post. Ref. Debit Credit Debit 20Y4, October 31 Balance Credit Account Fees Earned Account No. 41 Balance Date Item Post. Ref. Debit Credit Debit Balance Credit 20Y4, October 15 October 24 Account: Wages Expense Balance Account No. 51 Balance Date Item Post. Ref. Debit Credit Debit Credit 20Y4, October 30 Account: Rent Expense Account No. 53 Balance Date Item Post. Ref. Debit Credit Debit Balance Credit 20Y4, October 4 Account: Utilities Expense Account No. 54 Balance Balance Date Item Post. Ref. Debit Credit Debit Credit Account: Utilities Expense Balance Date Item Post. Ref. Debit Credit Debit 2014, October 27 Account Truck Expense Balance Date Item Post. Ref. Debit Credit Debit 20Y4, October 26 Account Miscellaneous Expense No. 59 Date Item Post. Ref. Debit 20Y4, October 27 Account No. 54 Balance Credit Account No. 55 Balance Credit Account Credit Balance Debit Balance Credit 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2014. List all accounts in the order of Assets, Liabilities, Stockholders' equity, Revenues, and Expenses. For those boxes in which no entry is required, leave the box blank. Pioneer Designs Unadjusted Trial Balance October 31, 20Y4 Account Debit Balances Credit Balances No. Unadjusted Trial Balance October 31, 20Y4 Account Debit Balances Credit Balances No. Totals 4. Determine the excess of revenues over expenses for October. 5. Why the amount determined in above might not be the net income for October? 1. Because the dividends are declared but not paid 2. Because the cash balance is incorrect. 3. Because the closing inventory balance is missing 4. Because necessary adjustment to expenses, like depreciation has not been made.