Principles of Accounting

Name: PHAM KHANH HUY

Class: BBC 5.4

Chapter 2

P2-2A Emily Valley is a licensed dentist. During the first month of the operation of her business,
the following events and transaction occurred:
1. Invested $20,000 cash in her business
2. Hired a secretary receptionist at a salary of $700 per week payable monthly.
3. Paid office rent for the month $1,000
4. Purchased dental supplies on account from Dazzle Company $4,000
5. Received dental services and billed insurance companies $5,100
6. Received $1,000 cash advance from Leah Mataruka for an implant
7. Received $2,100 cash for services performed from Michael Santos
8. Paid secretary receptionist for the month $2,800
9. Paid $2,400 to Dazzle for accounts payable due
Answers:
a)

General Journal
J1
Date Account Tiles and Explanation Ref. Debit Credit
April .1 Cash 101 20,000
Owner’s Capital 301 20,000
(Owner’s investment of cash in business)
1 No entry required

2 Rent expenses 729 1,100

Cash 101 1,100

3 Supplies 126 4,000

Account payable 201 4,000
 (Purchased supplies on account from Dazzle
Company)
10 Account Receivable 112 5,100
Service revenue 400 5,100
(Performed dental services and billed insurance
company)
11 Cash 101 1,000
Unearned service revenue 209 1,000
(Received cash advance from Leah Mataruka
for an implant)
20 Cash 101 2,100
Service revenue 400 2,100
(Received cash for services performed from
Michael Santos)
30 Salaries and Wages expense 726 2,800
Cash 101 2,800

30 Accounts payable 101 2,400

Cash 201 2,400

b)

General Ledger

Cash No. 101

Date Explanation Ref. Debit Credit Balance
2017
April. 1 J1 20,000 20,000
2 J1 1,100 18,900
11 J1 1,000 19,900
20 J1 2,100 22,000
30 J1 2,400 19,600
30 J1 2,800 16,800

Accounts Receivable No. 112

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 10 5,100 5,100
 Supplies No. 126

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 3 2,400 2,400

Accounts Payable No. 201

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 3 4,000 4,000
30 J1 2,400 1,600

Unearned service revenue No. 209

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 11 1,000 1,000

Owner’s Capital No. 301

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 1 20,000 20,000

Service Revenue No. 400

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 20 5,100 5,100
3 J1 2,100 7,200

Salaries and Wages expense No. 726

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 30 2,800 2,800
 Rent expenses No. 729

Date Explanation Ref. Debit Credit Balance

2017 J1
April. 30 1,100 1,100

c)

Emily’s business
Trial balance
April 30, 2017

Debit Credit
Cash $16,800
Accounts Receivable 5,100
Supplies 4,000
Accounts payable 1,600
Unearned service 1,000
revenue
Owner’s Capital 20,000
Service revenue 7,200
Salaries and Wages 2,800
expense
Rent expenses 1,100
Total $29,800 $29,800
E2-14 The accounts in the ledger of Overnite Delivery Service contain the following balances
on July 31, 2017:
Prepare a trial balance with the accounts arranged as illustrated in the chapter and fill in the
missing amount for cash.
Answers:

Overnite Delivery Service

Trial Balance
July 31, 2017

Debit Credit
Cash ($78,821 – debit total $12,481
without cash $66,340)
Account Receivable 7,642
Prepaid Insurance 1,968
Equipment 49,360
Account Payable $8,396
Owner’s Capital 42,000
Owner’s Drawing 700
Salaries and Wages Payable 815
Notes Payable 17,000
Service Revenue 10,610
Salaries and Wages Expense 4,428
Gasoline Expense 758
Utilities Expense 523
Maintenance and Repairs 961
Expense
Total $78,821 $78,821