Question

Denzel Brooks opened a Web consulting business called Venture Consultants and completed the following transactions in March.

March 1 Brooks invested $175,000 cash along with $27,000 in office equipment in the company in exchange for common stock.
2 The company prepaid $9,000 cash for six months' rent for an office. Hint: Debit Prepaid Rent for $9,000.
3 The company made credit purchases of office equipment for $5,100 and office supplies for $1,700. Payment is due within 10 days.
6 The company completed services for a client and immediately received $4,000 cash.
9 The company completed a $10,400 project for a client, who must pay within 30 days.
12 The company paid $6,800 cash to settle the account payable created on March 3.
19 The company paid $7,800 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $7,800.
22 The company received $3,500 cash as partial payment for the work completed on March 9.
25 The company completed work for another client for $4,980 on credit.
29 The company paid a $6,400 cash dividend.
30 The company purchased $1,000 of additional office supplies on credit.
31 The company paid $900 cash for this month's utility bill.
Required:
1. Prepare general journal entries to record these transactions using the following titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Prepaid Rent; Office Services Revenue; and Utilities Expense.
2. Prepare a trial balance as of the end of March.

Answer 1

Venture Consultants

General Journal

March 1

Cash $175,000 (debit)

Office equipment $27,000 (debit)

Common Stock $202,000 (credit)

March 2

Prepaid Rent $9,000 (debit)

Cash $9,000 (credit)

March 3

Office equipment $5,100 (debit)

Office supplies $1,700 (debit)

Accounts Payable $6,800 (credit)

March 6

Cash $4,000 (debit)

Service Revenue $4,000 (credit)

March 9

Accounts Receivable $10,400 (credit)

Service Revenue $10,400 (credit)

March 12

Accounts Payable $6,800 (debit)

Cash $6,800 (credit)

March 19

Prepaid Insurance $7,800 (debit)

Cash $7,800 (credit)

March 22

Cash $3,500 (debit)

Accounts Receivable $3,500 (credit)

March 25

Accounts Receivable $4,980 (debit)

Service Revenue $4,980 (credit)

March 29

Dividends $6,400 (debit)

Cash $6,400 (credit)

March 30

Office supplies $1,000 (credit)

Accounts Payable $1,000 (credit)

March 31

Utilities $900 (debit)

Cash $900 (credit)

Venture Consultants

Trial balance as March 31.

Debit Credit

Cash $151,600

Office equipment $31,100

Common Stock $202,000

Prepaid Rent $9,000

Office supplies $2,700

Accounts Payable $1,000

Service Revenue $19,380

Accounts Receivable $11,880

Prepaid Insurance $7,800

Dividends $6,400

Utilities $900

Total $222,380 $222,380

Step-by-step explanation:

Determine Account Balances at the end of the month as follows :

Cash : $175,000 - $9,000 + $4,000 - $6,800 - $7,800 + $3,500 - $6,400 - $900 = $151,600

Office equipment : $27,000 + $5,100 = $31,100

Common Stock : $202,000

Prepaid Rent: $9,000

Office supplies : $1,700 + $1,000 = $2,700

Accounts Payable : $6,800 - $6,800 + $1,000 = $1,000

Service Revenue : $4,000 + $10,400 + $4,980 = $19,380

Accounts Receivable: $10,400 - $3,500 + $4,980 = $11,880

Prepaid Insurance: $7,800

Dividends: $6,400

Utilities: $900