Question

Diana Mark is the president of ServicePro, Inc, a company that provides temporary employees for not-for-profit companies. Se rvicePro has been operating for five years, its revenues are increasing with each passing year, You have been hired to help Diana in analyzing the following transactions for the first two weeks of April:
April 2 Purchased office supplies for $900 on the account.

April 5 Billed the local United Way office $4,600 for temporary services provided.

April 8 Paid $330 for supplies purchased and recorded on account last period.

April 8 Placed an advertisement in the local paper for $800 cash.

April 9 Purchased new equipment for the office costing $3,100 cash.

April 10 Paid employee wages of $2,000, which were incurred in April.

April 11 Received $1,800 on account from the local United Way office billed on April 5.

April 12 Purchased land as the site of a future office for $14,000. The land value was appraised at $19,000. Paid $2,800 down and signed a long-term note payable for the balance.

April 13 Issued 1,700 additional shares of common stock for $40 per share in anticipation of building a new office.

April 14 Billed Family & Children's Services $2,800 for services rendered this month.

April 15 Received the April utility bill for $700 to be paid next month.

Required:

For each of the transactions, prepare journal entries.

Answer 1

Answer: Please see explanation column for answers

Explanation:

1.To record the Purchase of office supplies on account.

Date         Account titles and explanation         Debit         Credit

April 2                Office Supplies                         $900

Accounts Payable                                                                  $900

2.To record performed services on account

Date         Account titles and explanation         Debit         Credit

April 5            Accounts Receivable                  $4,600

                    Service revenue                                                   $4,600

3.To record office supplies  bought previously on account.

Date         Account titles and explanation         Debit            Credit

April 8         Accounts Payable                           $330

                   Cash Credit                                                            $330

4.To record Payment of  advertising expense for cash

Date         Account titles and explanation         Debit            Credit

April 8         Advertisement expense                 $800

                          Cash                                                                 $800

5.To record the Purchase equipment for cash

Date         Account titles and explanation         Debit           Credit

April 9                Equipment                              $3,100

                               Cash                                                         $3,100

6. To record Paid wage expenses for cash

Date         Account titles and explanation         Debit            Credit

April 10             Wages Expenses                      $2,000

                                   Cash                                                     $2,000

7. To record Collected cash from customers provided services billed April 5.

Date         Account titles and explanation         Debit            Credit

April 11           Cash                                               $1,800

             Accounts Receivable                                                  $1,800

8.To record the Purchase of  land by  signing note and giving a  down payment.

Date         Account titles and explanation         Debit           Credit

April 12           Land                                          $14,000

                     Cash                                                                    $2,800

                Notes payable                                                         $12, 200

9. To record the Issuance of  common stock for building an office

Date         Account titles and explanation         Debit            Credit

April 13        Office Building ( 1700 x$40)          $68,000

                        Common Stock                                               $68,000

10.To record Performed services on account.

Date         Account titles and explanation         Debit             Credit

April 14         Accounts Receivable                  $2,800

              Service Revenues                                                      $2,800

11. To record unpaid utilities bill to be paid in the next month.

Date         Account titles and explanation         Debit             Credit

April 15           Utilities expense                          $700

               Utilities payable                                                          $700