Chambers Brokerage Journal Entries
Not what you're looking for?
P2-3A Journalize transactions, post, and prepare a trial balance and financial statements.
(SO 2, 4, 6, 7)
Chambers Brokerage Services Inc. was formed on May 1, 2006. The following transactions took place during the first month.
Transactions on May 1:
1. Stockholders invested $120,000 cash in the company in exchange for stock.
2. Hired two employees to work in the warehouse. They will each be paid a salary of $2,000 per month.
3. Signed a 2-year rental agreement on a warehouse; paid $36,000 cash in advance for the first year. (Hint: The portion of the cost related to May 2006 is an expense for this month.)
4. Purchased furniture and equipment costing $70,000. A cash payment of $20,000 was made immediately; the remainder will be paid in 6 months.
5. Paid $3,000 cash for a one-year insurance policy on the furniture and equipment. (Hint: The portion of the cost related to May 2006 is an expense for this month.)
Transactions during the remainder of the month:
6. Purchased basic office supplies for $1,000 cash.
7. Purchased more office supplies for $3,000 on account.
8. Total revenues earned were $30,000-$10,000 cash and $20,000 on account.
9. Paid $800 to suppliers for accounts payable due.
10. Received $5,000 from customers in payment of accounts receivable.
11. Received utility bills in the amount of $400, to be paid next month.
12. Paid the monthly salaries of the two employees, totalling $4,000.
Instructions
A. Prepare journal entries to record each of the events listed.
B. Post the journal entries to T accounts.
C. Prepare a trial balance as of May 31, 2006.
D. Prepare an income statement and a retained earnings statement for Chambers Brokerage Services for the month ended May 31, 2006, and a balance sheet as of May 31, 2006.
Trial balance totals $202,600
I need the problem completely worked out so that I can get a full understanding. There is another post on the site that has the problem in MS Excel format, but the information was not plugged in correctly. Any help would be highly apprciated.
Purchase this Solution
Solution Summary
Example journal entries provided based on supplied information.
Solution Preview
See attached for proper formatting
Trans. Account Titles and Explanation Debit Credit
1. Cash 120,000
Chambers, Capital 120,000
2. No entry.
3. Prepaid Rent 33,000
Rent Expense 3,000
Cash 36,000
4. Furniture & Equipment 70,000
Cash 20,000
Accounts Payable 50,000
5. Prepaid Insurance 2,750
Insurance Expense 250
Cash 3,000
6. Office Supplies 1,000
Cash 1,000
7. Office Supplies 3,000
Accounts Payable 3,000
8. Cash 10,000
Accounts Receivable 20,000
Brokerage Revenue 30,000
9. Accounts Payable 800
Cash 800
10. Cash 5,000
Accounts ...
Purchase this Solution
Free BrainMass Quizzes
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Motivation
This tests some key elements of major motivation theories.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce