PC DEPOT

September 2018
I. Explain the events that probably gave rise to journal entries 1 through 8 of Exhibit 1.

1. The Owner invested $165,000 cash in the corporation, He/she loan to the Bank for
$100,000 with 15% interest and $65,000 from him/her own.
2. Paid $1,458 for the month of September.
3. Purchases $137,500 of merchandise inventory with cash.
4. Purchases furniture and fixtures for $15,500 with 10 year useful life.
5. Paid $3,000 to marketing company for advertising expense.
6. Paid employee salaries for $935.
7. Purchase $1,100 on office supplies.
8. Payment of utilities (water and electricity) for $275.
9. Cash sales for September $38,000.
10. Sales $14,850 on account.
11. Received cash $3,614 from customers credit.
12. Bills paid to merchandise suppliers for $96,195.
13. New merchandise received on credit from suppliers for $49,940.
14. Ms. Thompson ascertained the cost merchandise sold was $38,140.
15. Paid assistant salaries for $688.
16. Wages earned but unpaid at the end of September $440.
17. Rent paid for October $1,485.
18. Insurance bill paid $2,310 for one year (September 1 – August 31).
19. Bills received, but unpaid, from electricity company $226.
20. Purchased sign, paying $660 cash and agreeing to pay the $1,100 balance by
December 31.
II. General Journal

No Accounts D K
1 Cash 165,000
Bank Loan Payable (15%) 100,000
Proprietor's Capital 65,000
2 Rent Expense (September 1485
Cash 1485
3 Merchandise Inventory 137,500
Account Payable 137,500
4 Furniture and Fixture (10 year useful life) 15,500
Cash 15,500
5 Advertising Expense 1,320
Cash 1,320
6 Wages Expense 935
Cash 935
7 Office Supplies Expense 1,100
Cash 1,100
8 Utilities Expense 275
Cash 275
9 Cash 38,000
Sales 38,000
10 Account Receivable 14,850
Sales 14,850
11 Cash 3,614
Account Receivable 3,614
12 Account Payable 96,195
Cash 96,195
13 Merchandise Inventory 49,940
Account Payable 49,940
14 Cost of Goods Sold 38,140
Merchandise Inventory 38,140
15 Wages Expense 688
Cash 688
16 Wages Expense 440
Wages Payable 440
17 Prepaid Rent 1,485
Cash 1,485
18 Prepaid Insurance 2,310
Cash 2,310
19 Utilities expense 226
Account Payable 226
20 Furniture and Fixture 1,760
Cash 660
Account Payable 1,100
TOTAL 570,763 570,763
 III. General Ledger

Cash Prepaid Insurance Sales

Furniture and Fixture

COGS

Wages Payable

Wages Expense

Account Receivable

Account Payable

Office Supplies Expense

Merchandise Inventory

Advertising Expense

Bank Loan Payable

Prepaid Rent Utilities Expense

 IV. Adjusting Journal

PC DEPOT
Adjusting Journal
September 30th, 2018

Debit Credit

30/09/2018 Depreciation Expense 144

Accumulated Depreciation 144
(17.260/10)/12

30/09/2018 - Interest Expense 1250

Interest Payable 1250
(100.000 x 15%)/12

- Insurance Expense 192,5

Prepaid Insurance 192,5
(2.310/12)
V. Work Sheet
VI. Closing Journal

Closing Revenue
Account Dr Cr

Sales 52.850,0

Income Summary 52.850,0

Closing COGS
Account Dr Cr

Income Summary 38.140,0

COGS 38.140,0

Closing Expenses
Account Dr Cr
Income
Summary 8.055,5

Wages Expense 2.063,0

Office Supplies Expense 1.100,0

Advertising Expense 1.320,0

Utilities Expense 501,0

Rent Expense 1.485,0

Depreciation F&F
Expense 144,0

Interest Expense 1.250,0

insurance expense 192,5

Closing Retained Earning

Account Dr Cr

Income Summary 6.654,5

Proprietor's Capital 6.654,5