Worksheet for Chapter Two

Illustration of journalizing and posting entries

ANN Hill operated a project business known as Hill Project Studio:
March 1. The following assets were invested in the enterprise: cash $ 3,500; accounts receivable
$950; supplies $ 1200 and equipment $ 15,000.
Cash ……………………………………….…………..3,500
Accounts Receivable……………………………………950
Supplies………….……………………………..……..1,200
Equipment………………………………………..…..15,000
Ann Hill,
Capital………………………………………………………...20,650

March 1. Ann Hill paid $ 2,400 for rental contract; the payment is for 3 month rent.
Prepaid Rent…………………………………………………2,400
Cash……………………………………………………………..2,400
March 4. Purchased equipment on account from Palmer Equipment Inc. for$ 2,500:
Photographic Equipment…………….……..2,500
Accounts Payable…………………………………………2,500
March 5. Received $ 850 from customers in payment of their accounts:
Cash………………………………………………..…850
Accounts Receivable……………………………………….850
March 6. Paid $ 125 for newspaper advertisement:
Miscellaneous Expense………………………….…125
Cash………………………………………………………..…….125
March 10. Paid $ 500 to Palmer Equipment Inc. to apply on the $ 2,500 debt owed them
Accounts Payable…………………………………………500
Cash…………………………………………………………………500

March 13. Paid receptionist $ 575 for two week’s salary:

Salary Expense……………………………………….……..575
Cash………………………………………….………………..575

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March 16. Received $ 1,980 from sales for the first half of March:
Cash……………………………………………..1,980
Sales…………………………………..…………….……..1,980
March 27. Purchased supplies, $650 on cash.
Supplies…………………………………………..…………650
Cash……………………………………………..……………..650
March 27. Paid receptionist $ 575 for two week’s salary:
Salary Expense…………………………………..575
Cash……………………………………………….575
March 31. Paid $69 for telephone bill for the month:
Miscellaneous (utility) Exp………………………………69
Cash………………………………………..…..69
March 31. Paid $ 175 for electricity bill for the month:
Miscellaneous (utility) Exp……………………………..175
Cash………………………………………………..…175
March 31. Received $ 1,870 from sales for the second half:
Cash………………………………………1,870
Sales…………………………………………..….1, 870
March 31. Sales on account totaled $1,675 for the month:
Accounts Receivable……………………..1,675
Sales……………………………………………..1,675
March 31. Hill withdrew $1,500 for her personal use:
Ann Hill Drawing…………………………….1,500
Cash………………………………….…………..1,500

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Posting of the above illustration to the account (ledger)
Account: Cash Account No. 11
Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 1 3500 3500
1 2400 1100
5 850 1950
6 125 1825
1 500 1325
0
1 575 750
3
1 1980 2730
6
2 650 2080
0
2 575 1505
7
3 69 1436
1
3 175 1261
1
3 1870 3131
1
3 1500 1631
1

Account: A/R Account No. 12

Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 1 950 950
5 850 100
31 1675 1775
Account: Supplies Account No. 14
Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 1 1200 1200
20 650 1850

Account: Prepaid Rent Account No. 15

Post Balance

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 Date Item Ref. Debit Credit Debit Credit
Mar 1 2400 2400

Account: Photographic Equipment Account No. 18

Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 1 15000 15000
4 2500 17500

Account: A/P Account No. 21

Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 1 2500 2500
500 2000

Account: Ann Hill, Capital Account No. 31

Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 1 20650 20650

Account: Ann Hill, Drawing Account No. 32

Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 31 1500 1500

Account: Sales Account No. 41

Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 16 1980 1980
31 1670 3650
31 1675 5525

Account: Salary Expense Account No. 52

Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 13 575 575
27 575 1150

Account: Miscellaneous Expense Account No. 59

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 Post Balance
Date Item Ref. Debit Credit Debit Credit
Mar 6 125 125
31 69 194
31 175 369

PREPARING TRIAL BALANCE

The equality of debits and credits in the ledger should be verified at the end of each accounting
period. Such verification is called a trial balance. Example for Ann Hill Project studio is as
follows:

Hill Project Studio

Trial Balance
March 31, 2023
Cash 1,631
Accounts Receivable 1,775
Supplies 1,850
Prepaid Rent 2,400
Equipment 17,500
Accounts Payable 2,000
Ann Hill, Capital 20,650
Ann Hill Drawing 1500
Sales 5,525
Salary Expense 1,150
Miscellaneous Expense 369

28,175 28,175