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JOURNALIZING AND POSTING TRANSACTIONS AND PREPARING A TRIAL BALANCE Angela McWharton opened an on-call nursing services business. She rented a small office space and pays a part-time worker to answer the telephone. Her chart of accounts is shown below.
Angela McWharton Nursing Services
Chart of Accounts
Assets………………………………………Revenues
101 Cash……………………………401 Nursing Care Fees
142 Office Supplies
181 Office…………………………..Equipment Expenses
………………………………………511 Wages Expense
Liabilities……………………………512 Advertising Expense
202 Accounts Payable………………521 Rent Expense
………………………………………525 Telephone Expense
Owner’s Equity…………………….526 Transportation Expense
311 Angela McWharton, Capital……533 Electricity Expense
312 Angela McWharton, Drawing…549 Miscellaneous Expense
313 Income Summary
McWharton’s transactions for the first month of business are as follows:
Jan. 1 Invested cash in the business, $10,000.
1 Paid January rent, $500.
2 Purchased office supplies on account from Crestline Office Supplies, $300.
4 Purchased office equipment on account from Office Technology, Inc., $1,500.
6 Received cash for nursing services rendered, $580.
7 Paid telephone bill, $42.
8 Paid electricity bill, $38.
10 Received cash for nursing services rendered, $360.
12 Made payment on account for office supplies previously purchased, $50.
13 Reimbursed part-time worker for use of personal automobile (transportation expense), $150.
15 Paid part-time worker, $360.
17 Received cash for nursing services rendered, $420.
18 Withdrew cash for personal use, $100.
20 Paid for newspaper advertising, $26.
22 Paid for gas and oil, $35.
24 Paid subscription for journal on nursing care practices (miscellaneous expense), $28.
25 Received cash for nursing services rendered, $320.
27 Made payment on account for office equipment previously purchased, $150.
29 Paid part-time worker, $360.
30 Received cash for nursing services rendered, $180.
REQUIRED
1. Journalize the transactions for January using the modified cash basis and page 1 of a combination journal. Set up special columns for Nursing Care Fees (credit),
Wages Expense (debit), and Transportation Expense (debit).
2. Determine the cash balance as of January 12 (using the combination journal).
3. Prove the combination journal.
4. Set up general ledger accounts from the chart of accounts and post the transactions from the combination journal.
5. Prepare a trial balance.
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