Question

application problem 3 - 4.2 (static)

1. journalize the transactions
2. totals and prod reports

using the information provided for mundt. remember to record appropriate source
aug. 1 mikaela mundt invested $2,000.00 of her own money in the business. receipt no. 1.
3 used business cash to purchase supplies costing $216.00. wrote check no. 1.
4 wrote check no. 2 for insurance, $245.00.
5 purchased supplies for $68.00 over the phone from southern supplies, promising to send the check next week. memo no. 1.
11 sent check no. 3 to southern supplies, $68.00.
12 sent a check for the electricity bill, $180.00. check no. 4.
15 wrote $800.00 check to ms. mundt as a withdrawal of equity for personal use. used check no. 5.
16 sold services for $412.00 to j. lepowsky, who agreed to pay for them within ten days. sales invoice no. 1.
17 recorded cash sales of $1,179.00. calculator tape dated march 17. t17.
18 paid $132.00 for advertising. wrote check no. 6.
date account title doc. no. post. ref. general debit credit sales credit cash debit credit

Explanation:

Step1: Record investment

Debit Cash $2000, Credit Owner's Equity $2000.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 1 | Cash | Receipt No. 1 | | 2000 | | | 2000 | |
| Aug 1 | Owner's Equity - Mikaela Mundt | | | | 2000 | | | |

Step2: Record supplies purchase with cash

Debit Supplies $216, Credit Cash $216.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 3 | Supplies | Check No. 1 | | 216 | | | | 216 |
| Aug 3 | Cash | | | | 216 | | | |

Step3: Record insurance payment

Debit Pre - paid Insurance $245, Credit Cash $245.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 4 | Pre - paid Insurance | Check No. 2 | | 245 | | | | 245 |
| Aug 4 | Cash | | | | 245 | | | |

Step4: Record supplies purchase on account

Debit Supplies $68, Credit Accounts Payable - Southern Supplies $68.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 5 | Supplies | Memo No. 1 | | 68 | | | | |
| Aug 5 | Accounts Payable - Southern Supplies | | | | 68 | | | |

Step5: Record payment to supplier

Debit Accounts Payable - Southern Supplies $68, Credit Cash $68.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 11 | Accounts Payable - Southern Supplies | Check No. 3 | | 68 | | | | 68 |
| Aug 11 | Cash | | | | 68 | | | |

Step6: Record electricity bill payment

Debit Utilities Expense $180, Credit Cash $180.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 12 | Utilities Expense | Check No. 4 | | 180 | | | | 180 |
| Aug 12 | Cash | | | | 180 | | | |

Step7: Record owner's withdrawal

Debit Owner's Drawings - Mikaela Mundt $800, Credit Cash $800.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 15 | Owner's Drawings - Mikaela Mundt | Check No. 5 | | 800 | | | | 800 |
| Aug 15 | Cash | | | | 800 | | | |

Step8: Record credit sales

Debit Accounts Receivable - J. Lepowsky $412, Credit Sales $412.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 16 | Accounts Receivable - J. Lepowsky | Sales Invoice No. 1 | | 412 | | | | |
| Aug 16 | Sales | | | | 412 | 412 | | |

Step9: Record cash sales

Debit Cash $1179, Credit Sales $1179.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 17 | Cash | Calculator tape T17 | | | | | 1179 | |
| Aug 17 | Sales | | | | 1179 | 1179 | | |

Step10: Record advertising payment

Debit Advertising Expense $132, Credit Cash $132.
| DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | GENERAL DEBIT | GENERAL CREDIT | SALES CREDIT | CASH DEBIT | CASH CREDIT |
| ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- |
| Aug 18 | Advertising Expense | Check No. 6 | | 132 | | | | 132 |
| Aug 18 | Cash | | | | 132 | | | |

Answer:

The journal entries are shown above in the table - format for each transaction.