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Analyzing Transactions: Accounting
Analyzing Transactions: Accounting
Analyzing Transactions
Typical entries
Balancing a T-Account
Cash
First, foot
the debit 3,750 850
side. 4,300 1,400
2,900 700
10,950 2,900
Cash
3,750 850
4,300foot the
Next, 1,400
2,900
credit side. 700
10,950 2,900
5,850
Subtract total credits
Cash from total debits to
obtain the account
3,750 balance.
850
4,300 1,400
2,900 700
5,100 10,950 2,900
5,850
Transactions and Balance
Sheet Accounts
(A) On November 1, Chris Clark
deposits $25,000 in a bank account in
the name of NetSolutions.
JOURNAL Page 1
Post.
Date Description Ref. Debit Credit
2005
1 Nov. 1 Cash 25 000 00
2 Chris Clark, Capital 25 000 00
3 Invested cash in NetSolutions.
4
(A) On November 1, Chris Clark
deposits $25,000 in a bank account in
the name of NetSolutions.
4
5 5 Land 20 000 00
6 Cash 20 000 00
7 Purchased land for building
8 site.
9
10
(B) On November 5,
NetSolutions bought land
for $20,000, paying cash.
10
11 10 Supplies 1 350 00
12 Accounts Payable 1 350 00
13 Purchased supplies on account.
14
15
16
(C) On November 10, NetSolutions
purchased supplies on account
for $1,350.
30
31 30 Accounts Payable 950 00
32 Cash 950 00
33 Paid creditors on account.
34
35
36
(F) On November 30, NetSolutions
paid creditors on account, $950.
OWNER’S EQUITY
Owner’s Equity Accounts
Debit for Credit for
decreases increases
(-) (+)
(D) On November 18, NetSolutions
received fees of $7,500 from
customers for services provided .
14
15 18 Cash 7 500 00
16 Fees Earned 7 500 00
17 Received fees from customers.
18
19
20
(D) On November 18, NetSolutions
received fees of $7,500 from
customers for services provided .
Miscellaneous Expense
Nov. 30 275
In every entry the sum of
the debits always equal
the sum of the credits.
(G) On November 30, a count revealed
that $800 of the supplies inventory
had been used.
25
26 30 Supplies Expense 800 00
27 Supplies 800 00
28 Supplies used during
29 November.
30
31
(G) On November 30, a count revealed
that $800 of the supplies inventory
had been used.
JOURNAL Page 2
Post.
Date Description Ref. Debit Credit
2005
1 Nov. 30 Chris Clark, Drawing 2 000 00
2 Cash 2 000 00
3 Chris Clark withdrew cash for
4 personal use.
(H) On November 30, Chris Clark
withdrew $2,000 in cash from
NetSolutions for personal use.
JOURNAL Page 2
Post.
Date Description Ref. Debit Credit
2005
1 Dec. 31 Prepaid Insurance 2 400 00
2 Cash 2 400 00
3 Paid premium on two-year
4 policy.
JOURNAL Page 2
Post.
Date Description Ref. Debit Credit
2005
1 Dec. 1 Prepaid Insurance 2 400 00
2 Cash 2 400 00
3 Paid premium on two-year
4 policy.
14 1 Cash 14 360 00
15 Unearned Rent 23 360 00
16 Received advanced payment
17 For three months’ rent of land.
Dec. 4 NetSolutions purchased office
equipment on account from Executive
Supply Co. for $1,800.
JOURNAL Page 3
Post.
Date Description Ref. Debit Credit
2005
1 Dec. 13 Wages Expense 51 950 00
2 Cash 11 950 00
3 Paid two week’s wages.
4
Dec. 16 NetSolutions received $3,100 from
fees earned for the first half of
December.
5 16 Cash 11 3 100 00
6 Fees Earned 41 3 100 00
7 Received fees from customers.
8
Dec. 16 Fees earned on account totaled
$1,750 for the first half of
December.
18 21 Cash 11 650 00
19 Accounts Receivable 12 650 00
20 Received cash from customer
21 on account.
Dec. 23 NetSolutions paid $1,450 for
supplies.
22 23 Supplies 14 1 450 00
23 Cash 11 1 450 00
24 Purchased supplies.
25
Dec. 27 NetSolutions paid the receptionist
and part-time assistant $1,200 for
two weeks’ wages.
JOURNAL Page 4
Post.
Date Description Ref. Debit Credit
2005
1 Dec. 31 Utilities Expense 54 225 00
2 Cash 11 225 00
3 Paid utility bill.
4
Dec. 31 NetSolutions received $2,870 from
fees earned for the second half of
December.
5 31 Cash 11 2 870 00
6 Fees Earned 41 2 870 00
7 Received fees from customers.
8
Dec. 31 NetSolutions earned $1,120 on
account for the second half of
December.
The End