Entries into t accounts and trial balance leila durkin, an

Entries into T Accounts and Trial Balance

Leila Durkin, an architect, opened an office on May 1, 2012. During the month, she completed the following transactions connected with her professional practice:

Transferred cash from a personal bank account to an account to be used for the business, $30,000.

Paid May rent for office and workroom, $3,500.

Purchased used automobile for $25,000, paying $5,000 cash and giving a note payable for the remainder.

Purchased office and computer equipment on account, $9,000.

Paid cash for supplies, $1,200.

Paid cash for annual insurance policies, $2,400.

Received cash from client for plans delivered, $8,150.

Paid cash for miscellaneous expenses, $300.

Paid cash to creditors on account, $2,500.

Paid installment due on note payable, $400.

Received invoice for blueprint service, due in June, $1,200.

Recorded fee earned on plans delivered, payment to be received in June, $12,900.

Paid salary of assistant, $1,800.

Paid gas, oil, and repairs on automobile for May, $600.

1. Record the above transactions directly into the T accounts. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction.

2. Determine the balances of the T accounts.

Hint(s)

Cash

Bal.

Accounts Receivable

Supplies

Prepaid Insurance

Automobiles

Equipment

Notes Payable

Bal.

Accounts Payable

Bal.

Leila Durkin, Capital

Professional Fees

Bal.

Rent Expense

Salary Expense

Blueprint Expense

Automobile Expense

Miscellaneous Expense

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1, 2. First, identify what account is used and then what type of account is used. Every account is either an asset, liability, capital, withdrawal, revenue, or expense account. Every transaction involves at least two accounts. Then determine whether the account increases or decreases. Each increase or decrease is recorded as a debit or credit in the T-accounts, following the rules of debit and credit (See Exhibit 3). Net debits against credits to determine the balance and double-check to see if it is a normal balance for that account classification.

Hint(s)

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3. Prepare an unadjusted trial balance for Leila Durkin, Architect, as of May 31, 2012. For those boxes in which no entry is required, leave the box blank.

Leila Durkin, Architect

Unadjusted Trial Balance

May 31, 2012

Debit Balances

Credit Balances

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3. The trial balance lists the ending balance of each account in a corresponding Debit or Credit column. The trial balance column totals should be equal.

4. Determine the net income or net loss for May.

$