Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 1

Entries into T accounts and trial balance
Kimberly Manis, an architect, opened an office on January 1, 2016. During the month, she completed the following transactions connected with her professional practice:
a. Transferred cash from a personal bank account to an account to be used for the business, $18,000.
b. Paid January rent for office and workroom, $1,950.
c. Purchased used automobile for $28,500, paying $5,700 cash and giving a note payable for the remainder.
d. Purchased office and computer equipment on account, $4,500.
e. Paid cash for supplies, $1,875.
f. Paid cash for annual insurance policies, $3,600.
g. Received cash from client for plans delivered, $13,650.
h. Paid cash for miscellaneous expenses, $2,600.
i. Paid cash to creditors on account, $3,000.
j. Paid installment due on note payable, $950.
k. Received invoice for blueprint service, due in February, $3,750.
l. Recorded fees earned on plans delivered, payment to be received in February, $21,900.
m. Paid salary of assistants, $4,100.
n. Paid gas, oil, and repairs on automobile for January, $1,300.
Instructions
1. Record these transactions directy in the following T accounts, without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Kimberly Manis, Capital; Professional Fees; Salary Expense; Blueprint Expense; Rent Expense; Automobile 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 Kimberly Manis, Architect, as of January 31, 2016.
4. Determine the net income or net loss for January.