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    Preparation of Journal entries and Trial Balance

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    Business is booming for Dan Brown's home inspection business. He has been so busy the first month of business that he hasn't had time to keep up with his bookkeeping and has asked for your help. He has provided you with the detail regarding the following transactions:

    Date

    Transaction

    Dec 4

    First week of inspections. Inspected 3 homes.

    Charged clients a total of $900. Received payment

    From all clients at time of inspection.

    Dec 7

    Filled company truck with gasoline - paid cash, $43

    Dec 11

    Inspected 7 homes this week. Charged clients a

    total of $2,100. Received payment of $1,500, billed

    the remainder to clients.

    Dec 15

    Filled company truck with gasoline - paid cash, $43

    Dec 18

    Inspected 10 homes this week. Charged clients a

    total of $3,000. Received payment of $2,400, billed

    the remainder to clients.

    Dec 18

    Paid $350 for office supplies.

    Dec 22

    Purchased additional tools on company credit card, $475.

    Dec 25

    Inspected 6 homes this week. Charged clients a

    total of $1,800. Received payment of $600, billed

    the remainder to clients.

    Dec 28

    Paid $500 on company credit card bill. ($100 was interest)

    Dec 30

    Paid truck payment, $250 ($85 was interest).

    Dec 30

    Dan withdrew $2,000 from the business for personal use.

    Dec 30

    Received payment from clients, $1,800.

    Individually:

    1. Post the September, October, and November transactions (from previous task) in the ledger accounts.
    2. Journalize the December transactions
    3. Post the December transactions in the ledger accounts
    4. Prepare a Trial Balance for December.

    Group Portion:

    * In a 1000-1250 word memo to Dan, discuss the business's performance for the first year of operation. Has his business been successful so far? Why/why not? What can he do to improve the performance of his business?

    Use the following chart of accounts.

    Account Number

    Account Title

    100

    Cash

    110

    Accounts Receivable

    120

    Prepaid Insurance

    130

    Office Supplies

    140

    Books

    150

    Tools

    160

    Truck

    210

    Credit Card Payable

    220

    Truck Loan Payable

    300

    Dan Brown, Capital

    310

    Dan Brown, Drawing

    400

    Inspection Revenue

    610

    Training Expense

    620

    License Expense

    630

    Advertising Expense

    640

    Interest Expense

    650

    Gasoline Expense

    Click below for templates for the General Journal, General Ledger accounts and Trial Balance.

    Download Journal, General Ledger accounts and Trial Balance.

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    https://brainmass.com/business/journal-entries/preparation-of-journal-entries-and-trial-balance-245627

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    Solution Summary

    The solution contains the preparation of journal entries and trial balance and analyse the effect of various business transactions on the accounting equation.

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