Question no 1

EQUITY 31 Hannah Ellis, Capital 32 Hannah Ellis, Drawing On June 1, 20Y6, 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, $48,000. Paid rent for period of June 1 to end of month, $6,510. 6 Purchased office equipment on account, $19,340. Purchased a van for $39,100 paying $6,200 cash and giving a note payable for the remainder. 10 Purchased supplies for cash, $3,260. Received cash for job completed, $16,730. 15 Paid annual premiums on property and casualty insurance, $4,940. Recorded jobs completed on account and sent invoices to customers, $16,320. 24 Received an invoice for van expenses, to be paid in July, $2,060. Enter the following transactions on Page 2 of the two-column journal: CHART OF ACCOUNTS Whitworth Designs General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Equipment 18 Van LIABILITIES REVENUE 41 Fees Earned EXPENSES 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Van Expense 59 Miscellaneous Expense 21 Notes Payable 22 Accounts Payable Required: 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the 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 Y6. 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