then it wants to know how its posted in a journal

then it wants a t-chart

Left side of equation Right side of equation Assets Liabilities Stockholders' Equity + Assets Dr* Cr Left Right Inc Dec + Liabilities Dr Cr* Left Right Dec Inc + Common Stock Dr Cr" Left Right Dec Inc + Retained Earnings Dr Cr Left Right Dec Inc + indicates normal balance Dividends Dr Left Inc Revenue Cr" Right Inc + Expense Dr* Left Inc + #EP #2-1 (a) (b) (c) (a) (b) (c) (a) (b) (c) Accounts receivable Accrued liability Cash Cost of goods sold Professional fees expense Retained earnings Supplies Accounts payable Common stock Equipment Notes payable Plant Service revenue Wage expense Dividends Gas & oil expense Long-term debt Sales Supplies expense Utilities expense Wages payable (a) Indicate whether the account is a current asset (CA); property, plant, or equipment asset (PPE); current liability (CL); long- term liability (LL); stockholders' equity (SE); revenue (R), or expense (E). (b) Indicate the account's normal balance debit (D) or credit (C). (c) Indicate what is needed to INCREASE the account; a debit (D) or a credit (C). In manual accounting systems, after a transaction is analyzed and it is determined which accounts are affected by the transaction and whether these accounts should be increased or decreased, an entry is made into a journal (book of original entry) to record the transaction. The formatting of the entry used to record the transaction is as follows: 1) Enter the "Account name of accounts being debited" on the first line of the journal. The dollar amount which affects the account should be placed in the debit "column". 2) There is a possibility that more than one account may be debited in a transaction. If so, put the next account name that is to be debited on the next line of the journal, etc. 3) When all accounts being debited in the transaction have been listed, the account name being credited is placed on the next line indented to the "right) after the last account being debited. The dollar amount which affects the account should be placed in the credit "column". 4) Check to be sure the Debits (Lefts) in the entry equals the Credits (Rights) in the journal entry. The total dollar amount debited MUST equal the total dollar amount credited. Example Journal for ABC Company Account name Debit (left) Credit (right) Account name of account being debited $ Amount debited Account name of account being debited $ Amount debited Account name of account being credited $ Amount credited This same procedure is used in electronic accounting systems; however the data entry necessary for the transaction changes the formatting which is used. EP #2-2 Journalize the following transactions of Yellow's Accounting Services: Aug 1 Stockholders invested $5,600 cash in exchange for common stock of the corporation. Transaction analysis (Cash, an asset account, increases. Common stock, a stockholder's equity account, increases.) Cash Aug 1 Yellow hired a secretary at a salary of $150 per week, payable monthly. Transaction analysis (No actual transaction occurred. When will a transaction occur that will need to be recorded?) Aug 2 Paid office rent for the month of $360. Transaction analysis (Cash, an asset account, decreases. Rent expense, an expense account, increases, thereby decreasing stockholders' equity) Cash Aug 3 Purchased computer supplies on account from Green Ltd for $400. Transaction analysis (Computer supplies, an asset account, increases. Accounts payable, a liability account, increases. NOTE there is no effect on stockholders' equity) (EP #2-2 Continued) Aug 10 Completed payroll for Jordan Valley and billed $440 for services. Transaction analysis (Accounts receivable, an asset account, increases. Service revenue increases thereby increasing stockholders' equity-) Aug 11 Received $200 cash advance from J. Jones to set up accounting system. Transaction analysis (Cash, an asset account, increases. Unearned Revenue, a liability account, increases. No effect on stockholders' equity. Cash Aug 20 Received $920 for services completed for M. Smith. Transaction analysis (Cash, an asset account, increases. Service Revenue increases thereby increasing stockholders' equity) Cash Aug 30 Paid secretary for the month $600. Transaction analysis (Cash, an asset account, decreases. Salaries expense increases thereby decreasing stockholders' equity.) Cash Aug 30 Paid $40 on account payable due to Green Ltd from August 3. Transaction analysis (Cash, an asset account, decreases. Accounts Payable, a liability account decreases. No effect on stockholders' equity.) Cash (EP #2-2 Continued) Cash Accounts Receivable Supplies Accounts Payable Unearned Revenue Common Stock Service Revenue Salaries Expense Rent Expense Can you now prepare financial statements? (See HINTS below) Summary Income Statement Summary Balance Sheet Summarize the accounts into a trial balance (left has to equal right). Trial Balance Dr Cr Cash Accounts Receivable Supplies Accounts Payable Uneamed Revenue Common Stock Service Revenue Salaries Expense Rent Expense Total Summary Statement of Retained Earnings HINTS: Which statement will you prepare first? What account is missing from the trial balance that is needed to prepare the financial statements? How do you find the balance in this account