On October 1, 20Y4, Jay Pryor established an interior decarating business, Ploneer 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 busiriess in exchange for common stock, $16,100. October 4. Paid rent for period of October 4 to end of month, $1,560. October 10. Purchased a used truck for $13,000, paying $1,000 cash and 9iving a note payable for the remainder. October 13. Purchased equipment on account, $6,260. October 14. Purchased supplies for cash, $1,080. October 15. Paid annual premiums on property and casualty insurance, $2,420. October 15. Aeceived cash for job completed, $6,760. Enter the following transactions an Page 2 of the two-column journal: October 21. Paid credtor a portion of the amount owed for equipment purchased on October 13, \$2,240. October 24. Recorded jobs completed on account and sent invoices to customers, $7,700. October 26. Preceived an invoice for truck expenses, to be paid in Novembec, $710. October 27. Paid utilities expense, 5810 . October 27. Paid misceilaneous expenses, $290. October 29. Recelved cash from customers on account, 53,220 . October 30. Paid wages of employees, $2,140. October 31. Paid dividends, $1,790. 1. Journalze 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 seiecting 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 16. Equipment Truck Notes Payable Accounts Payable Common Stock Dividends Fees Earned Wages Expense Rent Expense Vialities Expense Truck Expense Misceilaneous Lxpense \begin{tabular}{lcccc} & General Journal & \multicolumn{2}{c}{ Page 2 } \\ \hline Date & Description & Post. Ref. & Debit & Credit \end{tabular} 20Y4, October 21 October 24 October 26 October 27-Utilities October 27-Misc. October 29 October 30 October 31 2. Post (in chronological order) the joumal to a ledger of four-column accounts, inserting approgriate posting references as each item is posted. Extend the balances to the appropriate balance columins after each transaction is posted. If an amount box does not require an entry, leave it blank. Account : Accounts Payable Account No. 22 Date Item Post. Ref. Debit Credit Calance October 13 October 21 October 26 \begin{tabular}{lccccc} Account : Common Stock & & & Account No. 31 \\ \hline Date Item & Post. Ref. & Debit & Credit & Debit & BalanceCredit \\ \hline 20Y4, \\ October 1 \end{tabular} Account : Dividends Account No. 33 \begin{tabular}{cccccc} \hline Date Item Post. Ref. Debit Bredit & Debit & Brealance \\ \hline 20Y4, \\ October 31 \end{tabular} \begin{tabular}{lccccc} \multicolumn{1}{l}{ Account : Fees Earned } & \multicolumn{2}{c}{ Account No. 41} \\ \hline Date Item Post. Ref. Debit & Credit & Debit & Credit \\ 20Y4, \\ October 15 \\ October 24 \end{tabular} \begin{tabular}{lcccccc} Account : Wages Expense & & Account No. 51 \\ \hline Date Item & Post. Ref. Debit & Credit & Debit & Credit \\ \hline DOY4,October30 & & \end{tabular} \begin{tabular}{lcccccc} Account : Rent Expense & & Account No. 53 \\ \hline Date Item & Post. Ref. & Debit & Credit & Debit & Calance \\ 20Y4, \\ October 4 \end{tabular} Account: Miscellaneous Expense 3. Prepare an unsdjusted trial bsiance for Pioneer Designs as of October 31, 20Y4, List all accounts in the order of Assets, Llabalities, Stockholders' equity, Revenues, and Expenses. If an amount box does not require an entry. leave it blank. 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
