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On November 1, 2016, Patty Cosgrove established an interior decorating business, Classic Designs. During the month, Patty completed the following transactions related to the business:

On November 1, 2016, Patty Cosgrove established an interior decorating business, Classic Designs. During the month, Patty completed the following transactions related to the business:

Nov. 1 Patty transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $26,000.
1 Paid rent for period of November 1 to end of month, $4,000.
6 Purchased office equipment on account, $12,820.
8 Purchased a truck for $31,750 paying $6,900 cash and giving a note payable for the remainder.
10 Purchased supplies for cash, $1,760.
12 Received cash for job completed, $8,000.
15 Paid annual premiums on property and casualty insurance, $2,300.
23 Recorded jobs completed on account and sent invoices to customers, $12,120.
24 Received an invoice for truck expenses, to be paid in November, $1,250.

Enter the following transactions on Page 2 of the two-column journal:

Nov. 29 Paid utilities expense, $3,460.
29 Paid miscellaneous expenses, $1,800.
30 Received cash from customers on account, $7,500.
30 Paid wages of employees, $4,750.
30 Paid creditor a portion of the amount owed for equipment purchased on November 6, $6,040.
30

Paid dividends, $2,000.

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

LEDGER

Score: 0/376

Account: Cash11Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

2

3

4

5

6

7

8

9

10

11

12

Account: Accounts Receivable12Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

2

Account: Supplies13Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Prepaid Insurance14Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Equipment16Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Truck18Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Notes Payable21Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Accounts Payable22Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

2

3

Account: Common Stock31Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Dividends33Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Fees Earned41Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

2

Account: Wages Expense51Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Rent Expense53Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Utilities Expense54Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Truck Expense55Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

Account: Miscellaneous Expense59Account No.

DATE ITEM POST. REF. DEBIT CREDIT BALANCE
DEBIT CREDIT

1

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

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

Some supplies ______ used during November, but supplies expense _______ recorded.

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