Instructions On November 1, 2018, Kris Lehman established an interior decorating business, Modern Designs. During the month, Kris completed the following transactions related to the business: Nov. 1 Kris transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $27,100. Paid rent for period of November 1 to end of month, $3,300. Purchased office equipment on account, $12,840. 1 6 8 10 Purchased a truck for $30,500 paying $7,000 cash and giving a note payable for the remainder Purchased supplies for cash, $1,740. Received cash for job completed, $7,500. Paid annual premiums on property and casualty insurance, $2,300. 12 15 23 Recorded jobs completed on account and sent invoices to customers, $12,410. 24 Received an invoice for truck expenses, to be paid in November, $1,400. Enter the following transactions on Page 2 of the two-column journal: Nov. 29 Paid utilities expense, $3,500. Paid miscellaneous expenses, $1,600. 29 30 Received cash from customers on account, $7,600. 30 Paid wages of employees, $4,000. Paid creditor a portion of the amount owed for equipment purchased on November 6, $6,030. 30 30 Paid dividends, $2,000. Required: 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts 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.) Refer to the Chart of Accounts for exact wording of account titles 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 Modern Designs as of November 30, 2018 4. Determine the excess of revenues over expenses for November 5. Can you think of any reason why the amount determined in (4) might not be the net income for November? Chart of Accounts CHART OF ACCOUNTS Modern Designs General Ledger ASSETS REVENUE 41 Fees Earned 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Equipment 18 Truck EXPENSES 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Truck Expense 59 Miscellaneous Expense LIABILITIES 21 Notes Payable 22 Accounts Payable EQUITY 31 Common Stock 33 Dividends Journal Shaded cells have feedback. 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart or accounts in selecting the accounts 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) Refer to the Chart of Accounts for exact wording of account titles How does greding work? PAGE 1 PAGE 2 JOURNAL Score: 403/434 ACCOUNTING EQUATION DATE DESCRIPTION POST. REF CREDIT ASSETS LIABILITIES EQUITY DEBIT 27.100.00 1 Nov. 1 Cash 1 2 Common Stock 27,100.00 1 Nov. 1 Rent Expense 3.300.00 + Cash 3,300.00 1 5 12.840.00 1 6 Nov. 6 Equipment Accounts Payable Nov. 8 Truck 12,840.00 1 7 2 30.500.00 1 Cash 7,000.00 + 9 9 23.500.00 1 Notes Payable Nov. 10 Supplies 10 1.740.00 f 11 Cash 1.740.00 1 Nov. 12 Cash 7,500.00 1 13 Fees Earned 7.500.00 14 2.500.00 1 15 2.300.00 1 16 12,410,00 t Nov. 15 Prepaid Insurance Cash Nov. 23 Accounts Receivable Fees Earned Nov. 24 Truck Expense Accounts Payable 17 12.410.00 1 18 1,400.00 1 19 1.400.00 1 Points 100 29/108 Feedback Check My Work 1. Identify which accounts are affected in each transaction. Keep in mind that every transaction involves at least two accounts. Determine whether the account increases or decreases and record each increase or decrease following the rules of debit and credit Use the Posting Reference column to enter the corresponding account number from the general ledger account. Remember total debits should equal total credits in your entries. Journal Shaded cells have feedback. 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the chart of accounts in selecting the accounts 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.) Refer to the Chart of Accounts for exact wording of account titles. How does grading work? PAGE 1 PAGE 2 JOURNAL Score: 403/434 ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Nov. 29 Utilities Expense 3,500.00 1 2 Cash 3,500.00 + 3 Nov. 29 Miscellaneous Expense 1.600.00 1 4 Cash 1,600.00 1 5 Nov. 30 Cash 7,600.00 6 Accounts Receivable 7,600.00 1 7 4,000.00 1 8 Nov. 30 Wages Expense Cash Nov. 30 Accounts Payable 4,000.00 + 9 9 6,030.00 1 10 Cash 6,030.00 1 11 Nov. 30 Dividends 2,000.00 1 12 Cash 2,000.00 1 Points: 100.29 / 108 Feedback Check My Work 1. Identify which accounts are affected in each transaction. Keep in mind that every transaction involves at least two accounts. Determine whether the account increases or decreases and record each increase or decrease following the rules of debit and credit. Use the Posting Reference column to enter the corresponding account number from the general ledger account. Remember total debits should equal total credits in your entries. Ledger 2 Pering this preses es regrestiginger ERC pealed the best ten geres Qumation not a LEGER Score: 376 POGT RET CREDIT CREDIT Act BALANCE DATE ITEN POGT RY CREDIT CREDIT Account POETRY CREDIT BALANCE CREDIT Account Phaped me A94 BALANCE POST RIT CREDIT CREDIT Account A. BALANCE POGT RIT . CREDIT CREDIT A. TT POGT RIT CREDIT CREDIT BALANCE POGT RY CREDIT CREDIT Account Accounts Payable AN BALANCE POETRY CREDIT CREDIT 3 Art Garn Stock A1 DATE POGT RY BALANCE CREDIT CREDIT Account Divisch Account No. 13 SANCE POTRE CREDIT CREDIT Account No. 41 POGTAT CREDIT BALANCE CREDIT Acc. 51 BALANCE POET AT CREDIT CREDIT - AEN A. BALANCE POETRY CREDIT CREDIT A. BALANCE TT POGT RY CREDIT Account Truck Expen BALANCE DATE TEN POT RIT CREDIT Account Man POETRY CREDIT CREDIT Unadjusted Trial Balance 3. Prepare an unadjusted trial balance for Modern Designs as of November 30, 2018 Question not attempted. Score: 0/67 Modern Designs UNADJUSTED TRIAL BALANCE November 30, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Supplies + Prepaid Insurance 5 Equipment 6 Truck 7 Notes Payable 8 Accounts Payable 9 Common Stock 10 Dividends 11 Fees Earned 12 Wages Expense 13 Rent Expense 14 Utilities Expense 15 Truck Expense 16 Miscellaneous Expense 17 Totals Final Question 4. Determine the excess of revenues over expenses for November. $ Points: 0/1 Feedback Check My Work Calculate Revenues - Expenses = Net Income. 5. Can you think of any reason why the amount determined in (4) might not be the net income for November? Because necessary adjustment to expenses, like depreciation has not been made. Because the cash balance is incorrect. Because the dividends are declared but not paid Because the closing inventory balance is missing. Points: 0/1