PRACTICE SET 1 000 1 000

RECORDING TRANSACTIONS
I. ANALYZING TRANSACI'ION
II. JOURNALIZINGTRANSACTIONS

1. Linda Smith, a sophomore at State University, started Instructions: Used the T accounts on the left to
the Speedy Ironing Service with a P 6 250 cash analyze each transaction, journalize on the right.
investment on Sept. 1, 1991. DR. CR.
Cash Capital, Linda Smith 1. Cash P 6 250
6 250 6 250 Capital, Linda Smith P 6 250
2. On Sept. 1, paid P 3 000 for 4 months of ads in the
School newspaper.
Cash Prepaid Advertising
3 000 3 000 2. Prepaid Advertising 3 000
3. On Sept. 1, purchased Ironing Supplies for P 500 Cash 3 000
cash.
Cash Ironing Supplies 3. Ironing Supplies 500
500 500 Cash 500
4. On Sept.1, purchased P 3 000 in Ironing Equipment
paying P 1 500 down.
Cash Ironing Equipment 4. Ironing Equipment 3 000
1 500 3 000 Cash 1 500
Accounts Payable 1 500
Accounts Payable
1 500
5. Linda made an additional investment of P 1 250.
Cash Capital, Linda Smith 5. Cash 1 250
1 250 1 250 Capital, Linda Smith 1 250
6. Paid one-half the amount owed on the Ironing
Equipment.
Cash Accounts Payable 6. Accounts Payable 750
750 750 Cash 7 50
7. Linda withdrew P 1 500 for personal use.
Cash Withdrawals, Linda Smith 7. Withdrawals,
1 500 1 500 Linda Smith 1 500
8. Cash collected for Ironing Services performed during Cash 1 500
the first month amounted to P 7 500. P 1 000 was also
due for services rendered.
Cash Ironing Revenue 8. Cash 7 500
7 500 8 500 Accounts Receivable 1 000
Cash 8 500
Accounts Receivable
1 000
9. Paid September rent of P 2 500 for a room used when
ironing clothes. 9. Rent Expense 2 500
Cash Rent Expenses Cash 2 500
2 500 2 500
10. Received P 500 on account. 10. Cash 500
Cash Accounts Receivable Accounts Receivable 500
500 500
11. Sept. 26, two students paid P 250 each for next week 11. Cash 500
I s ironing. Unearned Ironing 500
Cash Unearned Ironing Revenue
500 500
12. Paid monthly phone bill of P 1 000. 12. Telephone Expense 1 000
Cash Telephone Expense Cash 1 000
 III. GENERAL LEDGER

CASH Accounts Payable Capital, Linda Smith

(1) 6 250 (2) 3 000 (6) 750 (4) 1 500 (1) 6 Instructions: Post
250 previous page Journal
(5) 1 250 (3) 500 (5) 1 Entries into these T
250 accounts which have
(8) 7 500 (4) 1 500 been arranged according
(10) 500 (6) 750 Unearned Ironing Revenue to rewritten accounting
(11) 500 (7) 1 500 (11) 500 equation and make a
16,000 (9) 2 500 Trial Balance.
-10,750 (12)1 000 Withdrawals, Linda Smith
Bal. 5,250 (7) 1 500

Prepaid Advertising Rent Expense Ironing Revenue

(2) 3 000 (9) 2 500 (8) 8 500

Ironing Supplies Telephone Expenses

(3) 500 (12) 1 000

Ironing Equipment IV. TRIAL BALANCE

(4) 3 000
Speedy Ironing Service
Accounts Receivable Trial Balance
(8) 1 000 (10) 500 Sept. 30, 1991

Cash P 5 250
Accounts Receivable 500
Prepaid Advertising 3 000
Ironing Supplies 500
Ironing Equipment 3 000
Accounts Payable P 750
Unearned Ironing Revenue 500
Capital, Linda Smith 7 500
Withdrawals, Linda Smith 1 500
Note: A complete Trial Balance Ironing Revenue 8 500
for September 30 appears on Rent Expenses 2 500
page A20 of the next Practice Telephone Expense 1 000
Set.
P 17 250 P 17 250
Instruction: Record the first transaction from A8 in the formal journal below and post to the formal ledger accounts. Show
all references. Assume Cash is account #1 and Capital is account #100.

IV. GENERAL JOURNAL

DATE ACCOUNT TITLE AND PR DEBIT CREDIT
EXPLANATION
Sept. 1 Cash 1 1 250 00
Capital, Linda Smith 100 1 250 00
To record cash investment

V. GENERAL LEDGER
Cash ACCOUNT
NO. 1
 DATE EXPLANATION PR DEBIT CREDIT BALANCES
Sept. 1 1 250 00

Capital, Linda Smith ACCOUNT

NO. 100
DATE EXPLANATION PR DEBIT CREDIT BALANCES
Sept. 1
1 250 00