Required Before You Begin, Print Out All The Pages In This ✓ Solved

Required Before you begin, print out all the pages in this

The following balances appeared in the general ledger accounts of Fenton Table Rentals Corporation at April 1, 2019: Cash 5,000, Accounts receivable 5,000, Prepaid rent 200, Unused supplies 500, Accounts payable 4,000, Common stock 6,700.

Required: 1 Prepare journal entries to record the April transactions shown on the "Transactions" page. Include general ledger account numbers. 2 Post the transactions to the T- accounts. 3 Prepare a trial balance at April 30, 2019. 4 Prepare an interim income statement and statement of changes in equity for the month ended April 30, 2019, and interim balance sheet at April 30, 2019.

Transactions for April include: a. Collected cash owed by a customer $1,000; b. Billed customers for tables rented to date $1,000; c. Paid expenses: Advertising $100, Salaries $1,000, Telephone $500; d. Paid part of the accounts payable; e. Received a bill for April truck repair expenses $500; f. Collected cash owed by a customer $2,900; g. Billed customers for tables rented to date $2,000; h. Transferred prepaid rent to rent expense $60; i. Counted supplies amount still on hand $300; j. Paid a dividend $700.

Paper For Above Instructions

The month of April 2019 was significant for Fenton Table Rentals Corporation as it prepared to record several financial transactions. The company began with balances in various accounts, and as required, journal entries were needed to accurately reflect the economic events that occurred during this month. This paper outlines the journal entries, T-Accounts, trial balance, an interim income statement, a statement of changes in equity, and an interim balance sheet for Fenton Table Rentals Corporation for the period ending April 30, 2019.

1. Journal Entries for April Transactions

In order to reflect the transactions correctly in the general ledger, we start by preparing journal entries. Each transaction affects at least two accounts and follows the double-entry bookkeeping principle.

Transactions and Journal Entries

• April 1:
  • No journal entries needed for opening balances.
• Collected cash owed by a customer:
  • Debit Cash (101) $1,000
  • Credit Accounts Receivable (110) $1,000
• Billed customers for tables rented to date:
  • Debit Accounts Receivable (110) $1,000
  • Credit Service Revenue (470) $1,000
• Paid expenses:
  • Debit Advertising Expense (610) $100
  • Debit Salaries Expense (656) $1,000
  • Debit Telephone Expense (669) $500
  • Credit Cash (101) $1,600
• Paid part of the accounts payable:
  • Debit Accounts Payable (210) $X (amount paid)
  • Credit Cash (101) $X
• Received a bill for April truck repair expenses:
  • Debit Truck Operating Expense (670) $500
  • Credit Accounts Payable (210) $500
• Collected cash owed by another customer:
  • Debit Cash (101) $2,900
  • Credit Accounts Receivable (110) $2,900
• Billed customers for tables rented to date:
  • Debit Accounts Receivable (110) $2,000
  • Credit Service Revenue (470) $2,000
• Transferred prepaid rent to rent expense:
  • Debit Rent Expense (654) $60
  • Credit Prepaid Rent (162) $60
• Counted supplies and recorded amount used:
  • Debit Supplies Expense (668) $300
  • Credit Unused Supplies (173) $300
• Paid a dividend:
  • Debit Dividends (350) $700
  • Credit Cash (101) $700

2. Posting Transactions to T-Accounts

After these journal entries are created, we then post them to their respective T-accounts.

Here’s how the T-accounts may look after posting:

T-Accounts

Cash (101)

Debit: $5,000 + $1,000 + $2,900 (Total: $8,900)

Credit: $1,600 + $700 (Total: $2,300)

Ending Balance: $6,600

Accounts Receivable (110)

Debit: $5,000 + $1,000 + $2,000 (Total: $8,000)

Credit: $1,000 + $2,900 (Total: $3,900)

Ending Balance: $4,100

Prepaid Rent (162)

Debit: $200

Credit: $60

Ending Balance: $140

Unused Supplies (173)

Debit: $500

Credit: $300

Ending Balance: $200

Accounts Payable (210)

Debit: $X (amount paid)

Credit: $500

Ending Balance: $3,500 + X

Common Stock (320)

Ending Balance: $6,700

Dividends (350)

Debit: $700

Ending Balance: $700

Service Revenue (470)

Credit: $1,000 + $2,000

Ending Balance: $3,000

3. Trial Balance at April 30, 2019

The trial balance summarizes all accounts and ensures that total debits balance with total credits.

Trial Balance

Account	Debit	Credit
Cash	$6,600
Accounts Receivable	$4,100
Prepaid Rent	$140
Unused Supplies	$200
Accounts Payable		$3,500 + X
Common Stock		$6,700
Dividends	$700
Service Revenue		$3,000
Advertising Expense	$100
Salaries Expense	$1,000
Telephone Expense	$500
Truck Operating Expense	$500
Supplies Expense	$300
Rent Expense	$60
Total	$X	$X

4. Interim Income Statement and Statement of Changes in Equity

The income statement reflects revenues and expenses, showing the profitability of the company during the month of April.

Interim Income Statement for April 2019

Total Revenues: $3,000

Total Expenses: $100 + $1,000 + $500 + $300 + $60 + $500 = $2,460

Net Income: $3,000 - $2,460 = $540

Statement of Changes in Equity

Beginning Equity: $6,700

Add: Net Income: $540

Less: Dividends: $700

Ending Equity: $6,700 + $540 - $700 = $6,540

5. Interim Balance Sheet at April 30, 2019

Balance Sheet

Assets:

• Cash: $6,600
• Accounts Receivable: $4,100
• Prepaid Rent: $140
• Unused Supplies: $200

Total Assets: $6,600 + $4,100 + $140 + $200 = $11,040

Liabilities:

• Accounts Payable: $3,500 + X (amount unpaid)

Stockholders' Equity:

• Common Stock: $6,700
• Retained Earnings: $6,540

Total Liabilities and Equity: $X + (6,700 + 6,540) = $11,040

References

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