The Red Cab Co. has the following accounts:
101
Cash
401
Service Fees Earned
102
Accounts Receivable
501
Rent Expense
103
Supplies
502
Advertising Expense
111
Office Equipment
503
Utilities Expense
112
Accumulated Depreciation – Office Equipment
504
Depreciation Expense
201
Accounts Payable
505
Supplies Expense
202
Unearned Service Fees
506
Insurance Expense
301
Michael Red, Capital
507
Delivery Expense
Michael Red, Drawing
508
Miscellaneous Expense
302
Transactions for April 2012 are as follows:
April 1
1
2
4
6
8
The owner, Mr. Red, invested cash of P50,000 in his business.
Paid rent for the month, P5,000.
Paid cash for supplies, P2,100.
Paid advertising for the month, P1,200
Fees earned and billed to client for the month, P22,300.
Purchased office equipment on account, P10,000
April 10
12
20
25
30
30
Received cash from client previously billed, P7,200.
Paid creditor on account, P4,300.
Withdrew cash for personal use, P2,000.
Paid cash for repairs to office equipment, P700.
Paid telephone bill for the month, P1,500.
Paid electricity bill for the month, P1,000.
Required:
1. Set up a Red Cab, Co. chart of accounts . Please observe proper indexing.
2. Journalize Red Cab Co. transactions for April, 2012. Please observe standard format.
GENERAL
Particulars
Date
2012
Apr.
1
JOURNAL
PR
Page 1
Debit
Credit
Cash
Michael Red, Capital
(initial investment by the owner)
101
301
50,000
Rent Expense
Cash
(payment for rent for the month of Apr.)
501
101
5,000
Supplies
Cash
(payment for supplies)
103
101
2,100
Advertising Expense
Cash
(advertising for the month)
502
101
1,200
Accounts Receivable
Service Fees Earned
(service performed and billed)
102
401
22,300
Office Equipment
Accounts Payable
(acquired equipment on account)
111
201
10,000
10 Cash
Accounts Receivable
(cash receipts from client on account)
101
102
7,200
2
4
6
8
50,000
5,000
2,100
1,200
22,300
10,000
7,200
Date
2012
Apr
GENERAL
Particulars
JOURNAL
PR
Page 2
Credit
Debit
12 Accounts Payable
Cash
(payment of liability)
201
101
4,300
20 Michael Red, Drawing
Cash
(withdrawal of owner)
302
101
2,000
25 Miscellaneous Expense
Cash
(payment for the repairs of equipment)
508
101
700
30 Utilities Expense
Cash
(payment for telephone bill for the
month of Apr.)
503
101
1,500
30 Utilities Expense
Cash
(payment for electricity bill for the
month of Apr.)
503
101
1,000
4,300
2,000
700
1,500
1,000