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20 April, 13:52

Boilermaker House Painting Company

1. Sep 3 Paint houses in the current month for $20,000 on account.

2. Sep 8 Purchase painting equipment for $21,000 cash.

3. Sep 12 Purchase office supplies on account for $3,500.

4. Sep 15 Pay employee salaries of $4,200 for the current month.

5. Sept 19 Purchase advertising to appear in the current month for $1,000 cash.

6. Sep 22 Pay office rent of $5,400 for the current month.

7. Sep 26 Receive $15,000 from customers in (1) above.

8. Sep 30 Receive cash of $6,000 in advance from a customer who plans to have his house painted in the following month.

a) Record each transaction. The company uses the following accounts: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Deferred Revenue, Common Stock, Retained Earnings, Service Revenue, Salaries Expense, Advertising Expense, Rent Expense.

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Answers (1)
  1. 20 April, 13:57
    0
    The journal entries are shown below:

    1. Account receivable A/c Dr $20,000

    To Deferred revenue A/c $20,000

    (Being the paint house on account is recorded)

    2. Equipment A/c Dr $21,000

    To Cash A/c $21,000

    (Being the equipment is purchased for cash)

    3. Supplies A/c Dr $3,500

    To Accounts Payable A/c $3,500

    (Being the office supplies are purchased on credit basis)

    4. Salaries expense A/c Dr $4,200

    To Cash A/c $4,200

    (Being the employees salaries are paid for cash)

    5. Advertising expense A/c Dr $1,000

    To Cash A/c $1,000

    (Being the advertising are purchase for cash)

    6. Rent expense A/c $5,400

    To Cash A/c $5,400

    (Being the rent is paid for cash)

    7. Cash A/c Dr $15,000

    To Account receivable A/c $15,000

    (Being the cash is received)

    8. Cash A/c Dr $6,0000

    To Deferred revenue $6,000

    (Being the cash is received)
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