Q-1

Recording transactions directly in the ledger, preparing a trial balance

Ken Mazanec started a new business of cable television service with the name of “Ken
Mazanec Ltd”. During the first month (July, 2020) of operations, Mazanec completed the
following selected transactions:

July 5. Mazanec began the business with an investment of $30,000 cash and a building
valued at $50,000.
July 10. Borrowed $25,000 from the bank, signed a note payable.
July 12. Paid $32,000 for transmitting equipment.
July 15. Purchased office supplies on account, $400.
July 20. Paid employee salary, $1,300.
July 22. Received $500 for cable TV services performed for customers.
July 24. Rendered cable services to customers on account, $2,300.
July 25, Paid $100 of the account payable created in d.
July 26. Received a $600 bill for utility expense that will be paid in the near future.
July 27. Received cash for the services performed in f $1,100.
July 29. Paid the following cash expense:
(1) Rent on land, $1,000
(2) Advertising, $800.
Required:

1. Prepare the General Journal entries

2. Prepare the General Ledger
3. Prepare the Trial Balance

Q-2
Ford Fenn is the founder and president of Kidney Construction, a real estate development
venture. The business transactions during April while the company was being organized
are listed below.

Apr. 1 Fenn invested $800,000 cash in the business to start a new business.
Apr. 6 The company purchased office facilities for $400,000, of which $80,000 was
applicable to the land, and $320,000 to the building. A cash payment of
$90,000 was made and a note payable was issued for the balance of the
purchase price.
Apr. 10 Computer equipment was purchased from PCWorld for $10,000 cash.
Apr. 12 Office furnishings were purchased from Fred’s Furniture at a cost of $10,000.
A $1,000 cash payment was made at the time of purchase, and an agreement
was made to pay the remaining balance in two equal installments due May 1
and June 1. Fred’s Furniture did not require that Kidney sign a promissory
note.
Apr. 20 Office supplies were purchased from Office Planet for $800 cash.

Dr. M. Irfan Khan

drirfankhan2015@gmail.com
Apr. 25 Kidney discovered that it paid too much for a computer printer purchased on
April 10. The unit should have cost only $500, but Kidney was charged $550.
PCWorld promised to refund the difference within seven days.
Apr. 28 Mailed Fred’s Furniture the first installment due on the account payable for
office furnishings purchased on April 12.
Apr. 29 Received $50 from PCWorld in full settlement of the account receivable
created on April 25.

Instructions
a. Prepare journal entries to record the above transactions. Select the appropriate
account titles from the following chart of accounts:
b. Prepare the General Ledger
c. Prepare the Trial Balance

Cash Land
Accounts Receivable Office Building
Office Supplies Notes Payable
Office Furnishings Accounts Payable
Computer Systems Capital Stock

Dr. M. Irfan Khan

drirfankhan2015@gmail.com