On January 1, 20Y5, Fahad Ali established Mountain Top Realty, which completed the following transactions during the month: Jan. 1 Fahad Ali transferred cash from a personal bank account to an account to be used for the business, $53,000.
2 Paid rent on office and equipment for the month, $7,950.
3 Purchased supplies on account, $4,240.
4 Paid creditor on account, $2,320.
5 Earned fees, receiving cash, $24,180.
6 Paid automobile expenses (including rental charge) for month, $2,490, and miscellaneous expenses, $560.
7 Paid office salaries, $6,630.
8 Determined that the cost of supplies used was $1,860.
9 Withdrew cash for personal use, $2,600.
Required:
1. Journalize entries for transactions Jan. 1 through 9. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
2. Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank.
3. Prepare an unadjusted trial balance as of January 31, 20Y5.
4. Determine the following:
a. Amount of total revenue recorded in the ledger.
b. Amount of total expenses recorded in the ledger.
c. Amount of net income for January.
5. Determine the increase or decrease in owner’s equity for January.