Q$1)$ On June $1,20$Y$6,$ Hannah Ellis established an interior decorating business, Whitworth Designs. During the month, Hannah completed the following transactions related to the business:

June $1$ Hannah transferred cash from a personal bank account to an account to be used for the business, $$27,600.$

$1$ Paid rent for period of June $1$ to end of month, $$3,200.$

$6$ Purchased office equipment on account, $$12,860.$

$8$ Purchased a van for $$31,700$ paying $$6,200$ cash and giving a note payable for the remainder.

$10$ Purchased supplies for cash, $$1,480.$

$12$ Received cash for job completed, $$8,400.$

$15$ Paid annual premiums on property and casualty insurance, $$2,400.$

$23$ Recorded jobs completed on account and sent invoices to customers, $$12,060.$

$24$ Received an invoice for van expenses, to be paid in July, $$1,230.$

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

June $29$ Paid utilities expense, $$3,590.$

$29$ Paid miscellaneous expenses, $$1,500.$

$30$ Received cash from customers on account, $$7,400.$

$30$ Paid wages of employees, $$4,200.$

$30$ Paid creditor a portion of the amount owed for equipment purchased on June $6,$ $$6,190.$

$30$ Withdrew cash for personal use, $$2,200.$

Required:

$1.$ Journalize each transaction in a two$-$column journal beginning on Page $1,$ referring to the chart of accounts in selecting the accounts to be debited and credited. $($Do not insert the post reference numbers until you have posted the entry to the general ledger in part $2.)$

$2.$ 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.

$3.$ Prepare an unadjusted trial balance for Whitworth Designs as of June $30,20$Y$6.$

$4.$ Determine the excess of revenues over expenses for June.

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

CHART OF ACCOUNTS

Whitworth Designs

General Ledger

ASSETS

$11$ Cash

$12$ Accounts Receivable

$13$ Supplies

$14$ Prepaid Insurance

$16$ Equipment

$18$ Van

LIABILITIES

$21$ Notes Payable

$22$ Accounts Payable

EQUITY

$31$ Hannah Ellis, Capital

$32$ Hannah Ellis, Drawing

REVENUE

$41$ Fees Earned

EXPENSES

$51$ Wages Expense

$53$ Rent Expense

$54$ Utilities Expense

$55$ Van Expense

$59$ Miscellaneous Expense

$1.$ Journalize each transaction in a two$-$column journal beginning on Page $1,$ referring to the chart of accounts in selecting the accounts to be debited and credited. $($Do not insert the post reference numbers until you have posted the entry to the general ledger in part $2.)$

General Journal Instructions

PAGE $1$PAGE $2$

JOURNALACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

$2.$ 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.

General Ledger Instructions

LEDGER

DATE ITEM POST. REF. DEBIT CREDIT BALANCE

DEBIT CREDIT

$3.$ Prepare an unadjusted trial balance for Whitworth Designs as of June $30,20$Y$6.$

Whitworth Designs

UNADJUSTED TRIAL BALANCE

June $30,20$Y$6$

ACCOUNT TITLE DEBIT CREDIT

$1$

Cash

$2$

Accounts Receivable

$3$

Supplies

$4$

Prepaid Insurance

$5$

Equipment

$6$

Van

$7$

Notes Payable

$8$

Accounts Payable

$9$

Hannah Ellis, Capital

$10$

Hannah Ellis, Drawing

$11$

Fees Earned

$12$

Wages Expense

$13$

Rent Expense

$14$

Utilities Expense

$15$

Van Expense

$16$

Miscellaneous Expense

$17$

Totals

$4.$ Determine the excess of revenues over expenses for June.

$

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

a$)$Because necessary adjustment to expenses, like depreciation has not been made. b$)$Because the closing inventory balance is missing.

c$)$Because the dividends are declared but not paid.

d$)$Because the cash balance is incorrect.