Business Transactions

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Business Transactions for May 1978:

May 1 Joe Josepher invested $10,000, a building worth $20,000, and supplies valued at $5,000 in the business.
May 4 Purchased $15,000 of equipment, paying $1,000 cash and signing a two-year, 10% note payable for the remainder. May 7 Rendered services to customers for $3,000 cash and $8,000 on credit.
May 10 Used up $1,000 worth of supplies.
May 11 Paid salaries of employees $2,000.
May 25 Paid rent for May, $900.
May 30 Borrowed $10,000 from the Third National Bank, signing a 90 day, 10% note.
The KKPK Co. prepares financial statements once each year at the end of December. Below is the trial balance for the company as of December 31, 1978, and the additional information needed for the adjustments. Complete a worksheet.
Trial Balance
December 31, 1978 Cash $10,000
Accounts receivable $8,000
Prepaid insurance $1,200
Supplies $3,000
Equipment $10,000
Accumulated depreciation-Equipment $4,000
Accounts payable $4,000
Notes payable $5,000
G. Keith, Capital $9,400
G. Keith withdrawals $6,000
Service revenue $30,000
Miscellaneous Revenue $2,000
Salaries expense $8,000
Rent expense $4,800
Utilities expense $2,400
Miscellaneous expense $1,000
Total $54,400 $54,400
Information for adjustments:
a. Account of the supplies on hand on December 31 indicated a total of $400.
b. The equipment has a ten year life.
c. The prepaid insurance policy was purchased in 1976. The life of the policy was three years(1976-1978).
d. Salaries earned by the employees during the year, but unpaid as of December 31, totaled $500.
e. Interest of $1,000 was incurred but not paid as of December 31.
f. The property taxes for 1978($1,000) will be paid in January, 1979
Record the following transactions in the general journal provided and post each transaction to the ledger accounts provided.
101 Cash
102 Accounts Receivable
103 Supplies
105 Building
107 Equipment
203 Notes Payable
301 Joe Josepher, Capital
302 Joe Josepher, Withdrawals
401 Service Revenue
501 Supplies expense
503 Salaries expense
505 Rent expense