Patty Cosgrove established an interior decorating business, Classic Designs.  During  the  month,  Patty  completed  the  following  transactions  related  to  the business:

Nov.    1.  Patty transferred cash from a personal bank account to an account to be used for the business in exchange for common stock,  $27,750.

1.  Paid rent for period of November 1 to end of month,  $4,000.

6.  Purchased office equipment on account,  $12,880.

8. Purchased a truck for $32,500 paying $6,500 cash and giving a note payable for the remainder.

10.  Purchased supplies for cash, $1,860.

12.    Received cash for job completed, $7,500.

 

 

Nov.   15.  Paid annual premiums on property and casualty insurance,  $2,400.

23.    Recorded jobs completed on account and sent invoices to customers, $12,440.

24.    Received an invoice for truck expenses, to be paid in November, $1,100.

Enter the following transactions on Page 2 of the two-column    journal:

29.  Paid utilities expense, $3,660.

29.    Paid miscellaneous expenses, $1,700.

30.    Received cash from customers on account, $8,000.

30.  Paid wages of employees, $4,750.

30. Paid creditor a portion of the amount owed for equipment purchased on November 6, $6,220.

30.  Paid dividends, $2,000.

instructions

1.     Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.

11   Cash                                                                                            31 Common Stock

12   Accounts Receivable                                                       33 Dividends

13   Supplies                                                                                    41 Fees Earned

14   Prepaid Insurance                                                             51 Wages Expense

16   Equipment                                                                            53   Rent Expense

18  Truck                                                                                           54   Utilities Expense

21   Notes Payable                                                                      55 Truck Expense

22   Accounts Payable                                                              59 Miscellaneous Expense

2.     Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

3.     Prepare an unadjusted trial balance for Classic Designs as of November 30, 2016.

4.     Determine the excess of revenues over expenses for November.

5.     Can you think of any reason why the amount determined in (4) might not be the net income for November?