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Acorn Nursery School: Transactions, Journalize, Trial Balance

Transaction analysis, General Ledger, Ledger Accounts and Trial Balance

P. The Acorn Nursery School Company provides baby-sitting and child-care programs. On January 31, 20xx, the company had the following trial balance

Acorn Nursery School Company
Trial Balance
January 31, 20xx

Cash (111) $1,870
Accounts Receivable (113) $1,700
Equipment (141) $1,040
Buses (143) 17,400
Notes Payable (211) $15,000
Accounts Payable (212) $1,640
J. Wells, Capital (311) $5,370
________ _______
$22,010 $22,010
__________ ________

During the month of February, the company completed the following transactions:

Feb 2 Paid the month's rent, $270
3 Received fees for the this month's services, $650
4 Purchased supplies on account, $85
5 Reimbursed the bus driver for gas expense, $40
6 Ordered playground equipment, $1,000
8 Made a payment on account, $170
9 Received cash from customers on account, $1,200
10 Billed customers who had not yet paid for the month's services, $700
11 Paid for supplies purchased on February 4
13 Received and purchased playground equipment ordered on February 6
for cash , $1,000
17 Purchased equipment on account, $290
18 Paid this month's utility bill, $145
22 Received cash for one month's services from customers previously
billed, $500
26 Paid part-time assistants for services, $460
27 Purchased gas and oil for the bus on account, $325
28 Made a cash withdrawal of $110

Required
1. Open accounts in the ledger for the accounts in the trial balance plus the following ones: (115); J. Wells withdrawals (313); Service Revenue (411); Rent Expense (511); Gas and Oil Expense (512); Wages Expense (513); and Utilities Expense (514)
2. Enter the January 31, 20xx account balances from the trial balance
3. Enter the above transactions in the general journal
4. Post the entries to the ledger accounts. Be sure to make the appropriate posting references in the journal and ledger as you post
5. Prepare the a trial balance as of February 28, 20xx
6. User insight: Examine the transactions for February 3, 9, 10, and 22. What were the revenues? What business issue might you see arising from the differences in these numbers?

Solution Preview

1) Add accounts into the ledger
Cash (111)
Accounts Receivable (113)
Supplies (115)
Equipment (141)
Buses (143)
Notes Payable (211)
Accounts Payable (212)
J. Wells, Capital (311)
J. Wells, withdrawals (313)
Service Revenue (411)
Rent Expense (511)
Gas and Oil Expense (512)
Wages Expense (513)
Utilities Expense (514)

2) seems unnecessary, overlapping with part 4 and 5

3)
Dr. Rent Expense (511) $270
Cr. Cash (111) $270

Dr. Cash (111) $650
Cr. Service Revenue (411) ...

Solution Summary

The solution examines transactions, journalize and trial balances for Acorn Nursery School.

$2.19