Reference no: EM132738713

Problem - Entries into T accounts and trial balance - Marjorie Knaus, an architect, organized Knaus Architects on January 1, 20Y4. During the month, Knaus Architects completed the following transactions:

a. Issued common stock to Marjorie Knaus in exchange for $30,000.

b. Paid January rent for office and workroom, $2,500.

c. Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder.

d. Purchased office and computer equipment on account, $8,000.

e. Paid cash for supplies, $2,100.

f. Paid cash for annual insurance policies, $3,600.

g. Received cash from client for plans delivered, $9,000.

h. Paid cash for miscellaneous expenses, $2,600.

i. Paid cash to creditors on account, $4,000.

j. Paid installment due on note payable, $1,875.

k. Received invoice for blueprint service, due in February, $5,500.

l. Recorded fees earned on plans delivered, payment to be received in February, $31,400.

m. Paid salary of assistants, $6,000.

n. Paid gas, oil, and repairs on automobile for January, $1,300.

Instructions -

1. Record these transactions directly in the following T accounts, without journalizing: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes Payable, Accounts Payable, Common Stock, Professional Fees, Salary Expense, Blueprint Expense, Rent Expense, Auto-mobile Expense, Miscellaneous Expense. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction.

2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.

3. Prepare an unadjusted trial balance for Knaus Architects as of January 31, 20Y4.

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