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# General journal and ledger with explanation

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The following is a list of transactions from Danny and Mary Jane's first month of business:

May 1 Danny and Mary Jane deposited \$50,000 into business checking account
May 1 Rented theater building for shows - paid 6 months rent up front - \$24,000
May 1 Purchased six-month insurance policy to cover rented building and customers - \$3,000
May 1 Paid utility deposits - \$250
May 5 Purchased advertisements in local newspapers and radio stations, \$2,500
May 6 Purchased stage props and costumes for opening night - \$1,200
May 10 Opening night was a success! Danny and MaryJane sold 100 tickets at \$10 each
May 15 The remainder of the first week ticket sales totaled \$2,000
May 16 Paid workers for first week of services - \$1,000
May 22 Second week ticket sales totaled \$2,400
May 23 Paid workers for second week of services - \$1,000
May 29 Third week ticket sales totaled \$3,000
May 30 Paid workers for third week of services - \$1,000

Using the journal and ledger forms provided with a trial balance after closing accounts. Journalize and post the first month's transactions. Additionally, in a memo to Danny and Mary Jane, summarize the month's transactions and comment on what they might do to improve for upcoming months.

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Memo:

Being 1st month of the business, the business generated revenue of \$8400. Rent & Insurance has been prepaid in advance for 6 months. The advertisement ...

#### Solution Summary

The solution provide General journal and ledger with explanation for Danny & Mary Jane for their first month of business.

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## Accountng

Comprehensive Problem: Chapters 3 to 7

Raymond Company has the following opening account balances in its general and subsidiary ledgers on January 1 and uses the periodic inventory system. All accounts have normal debit and credit balances.

Jan. 3 Sell merchandise on credit to B. Soto \$3,100, invoice no. 510, and J. Ebel \$1,800, invoice no. 511.
5 Purchase merchandise from S. Welz \$3,000 and D. Laux \$2,700.
7 Receive checks for \$4,000 from S. Kysely and \$2,000 from B. Jacovetti.
8 Pay freight on merchandise purchased \$180.
9 Send checks to S. Liazuk for \$9,000 and D. Nguyen for \$11,000.
9 Issue credit memo for \$300 to J. Ebel for merchandise returned.
10 Summary cash sales total \$15,500.
11 Sell merchandise on credit to R. Draves for \$1,900, invoice no. 512, and to S. Kysely \$900, invoice no. 513.
Post all entries to the subsidiary ledgers.
12 Pay rent of \$1,000 for January.
13 Receive payment in full from B. Soto and J. Ebel.
15 Withdraw \$800 cash by I. Raymond for personal use.
16 Purchase merchandise from D. Nguyen for \$15,000, from S. Liazuk for \$13,900, and from S. Welz for \$1,500.
17 Pay \$400 cash for office supplies.
18 Return \$200 of merchandise to S. Liazuk and receive credit.
20 Summary cash sales total \$17,500.
21 Issue \$15,000 note to R. Mikush in payment of balance due.
21 Receive payment in full from S. Kysely.
Post all entries to the subsidiary ledgers.
22 Sell merchandise on credit to B. Soto for \$1,700, invoice no. 514, and to R. Draves for \$800, invoice no. 515.
23 Send checks to D. Nguyen and S. Liazuk in full payment.
25 Sell merchandise on credit to B. Jacovetti for \$3,500, invoice no. 516, and to J. Ebel for \$6,100, invoice no. 517.
27 Purchase merchandise from D. Nguyen for \$14,500, from D. Laux for \$1,200, and from S. Welz for \$2,800.
28 Pay \$200 cash for office supplies.
31 Summary cash sales total \$19,920.
31 Pay sales salaries of \$4,300 and office salaries of \$2,600.

Instructions
a. Record the January transactions in the appropriate journal-sales, purchases, cash receipts, cash payments, and general.
b. Post the journals to the general and subsidiary ledgers. New accounts should be added and numbered in an orderly fashion as needed.
c. Prepare a trial balance at January 31, 2005, using a work sheet. Complete the work sheet using the following additional information.

1. Office supplies at January 31 total \$700.
2. Insurance coverage expires on October 31, 2005.
3. Annual depreciation on the equipment is \$1,500.
4. Interest of \$30 has accrued on the note payable.
5. Merchandise inventory at January 31 is \$16,000.
d. Prepare a multiple-step income statement and a statement of owner's equity for January and a classified balance sheet at the end of January.
e. Prepare and post the adjusting and closing entries.
f. Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

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