Question

Marjorie Knaus, an architect, organized Knaus Architects on January 1, 2018. During the month, Knaus Architects completed the following transactions:
A. Issued common stock to Marjorie Knaus in exchange for $30,000.
B. Paid January rent for office and workroom, $2,500.
C. Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder.
D. Purchased office and computer equipment on account, $8,000.
E. Paid cash for supplies, $2,100.
F. Paid cash for annual insurance policies, $3,600.
G. Received cash from client for plans delivered, $9,000.
H. Paid cash for miscellaneous expenses, $2,600.
I. Paid cash to creditors on account, $4,000.
J. Paid installment due on note payable, $1,875.
K. Received invoice for blueprint service, due in February, $5,500.
L. Recorded fees earned on plans delivered, payment to be received in February, $31,400.
M. Paid salary of assistants, $6,000. N. Paid gas, oil, and repairs on automobile for January, $1,300.
Instructions
1. Record these transactions directly in the following T accounts, without journalizing: Cash, Ac-counts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes Payable, Ac¬counts Payable, Common Stock, Professional Fees, Salary Expense, Blueprint Expense, Rent Expense, Automobile Expense, Miscellaneous Expense. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction.
2. Determine account balan

Answer 1

Answer:

Knaus Architects

T-accounts:

Cash

Account Titles               Debit       Credit

Common stock       A. $30,000

Rent Expense                            B.  $2,500

Automobiles, Equipment          C.    6,000

Supplies                                     E.     2,100

Prepaid Insurance                     F.    3,600

Accounts Receivable G. 9,000

Miscellaneous Expenses          H.   2,600

Accounts Payable                      I.    4,000

Notes Payable                           J.     1,875

Salary Expense                         M.  6,000

Automobiles Expense              N.    1,300

Balance                                         $9,025

Total                          $39,000   $39,000

Accounts Receivable

Account Titles               Debit       Credit

Cash                                          G. $9,000

Professional Fees   L.  31,400

Balance                                       $22,400

Supplies

Account Titles               Debit       Credit

Cash                        E. $2,100

Prepaid Insurance

Account Titles               Debit       Credit

Cash                       F. $3,600

Automobiles, Equipment

Account Titles               Debit       Credit

Notes Payable         C. $22,500

Cash                         C.     6,000

Accounts Payable    D.     8,000

Balance                                         $36,500

Notes Payable

Account Titles               Debit       Credit

Automobiles, Equipment       C. $22,500

Cash                         J. $1,875

Balance                    $20,625

Accounts Payable

Account Titles               Debit       Credit

Automobiles, Equipment        D. $8,000

Cash                        I. $4,000

Blueprint Expense                  K.   5,500

Balance                     $9,500

Common Stock

Account Titles               Debit       Credit

Cash                                          A. $30,000

Professional Fees

Account Titles               Debit       Credit

Accounts Receivable              L. $31,400

Salary Expense

Account Titles               Debit       Credit

Cash                        M. $6,000

Blueprint Expense

Account Titles               Debit       Credit

Accounts Payable   K. $5,500

Rent Expense

Account Titles               Debit       Credit

Cash                        B.   $2,500

Automobile Expense

Account Titles               Debit       Credit

Cash                        N. $1,300

Miscellaneous Expense

Account Titles               Debit       Credit

Cash                          H. $2,600

Trial Balance

As of January 31, 2018:

Account Titles                       Debit       Credit

Cash                                   $9,025

Accounts receivable         22,400

Supplies                                2,100

Prepaid Insurance               3,600

Automobiles, Equipment  36,500

Notes Payable                                    $20,625

Accounts Payable                                  9,500

Common Stock                                    30,000

Professional Fees                                31,400

Salary Expense                   6,000

Blueprint Expense              5,500

Rent Expense                     2,500

Automobiles Expense        1,300

Miscellaneous Expense    2,600

Totals                              $91,525    $91,525

Explanation:

a) Data and Transaction Analysis:

A. Cash $30,000 Common Stock

B. Rent Expense $2,500 Cash $2,500

C. Automobiles, Equipment $28,500 Cash $6,000 Notes Payable $22,500

D. Automobiles, Equipment $8,000 Accounts Payable $8,000

E. Supplies $2,100 Cash $2,100

F. Prepaid Insurance $3,600 Cash $3,600

G. Cash $9,000 Accounts Receivable $9,000

H. Miscellaneous expenses, $2,600 Cash $2,600

I. Accounts Payable $4,000 Cash $4,000

J. Notes Payable $1,875 Cash $1,875

K. Blueprint Expense $5,500 Accounts Payable $5,500

L. Accounts Receivable $31,400 Professional Fees $31,400

M. Salary Expense $6,000 Cash $6,000

N. Automobiles Expense $1,300 Cash $1,300