Answer
Here are the journal entries for Wickers Restoration Services for May:
1. **Received \$48,000 from sale of common stock.**
```
Debit: Cash $48,000
Credit: Common Stock $48,000
```
2. **Paid rent on office for the month, \$880.**
```
Debit: Rent Expense $880
Credit: Cash $880
```
3. **Purchased supplies on account, \$1,750.**
```
Debit: Supplies $1,750
Credit: Accounts Payable $1,750
```
4. **Earned fees, receiving cash, \$12,600.**
```
Debit: Cash $12,600
Credit: Service Revenue $12,600
```
5. **Paid creditor on account, \$1,000.**
```
Debit: Accounts Payable $1,000
Credit: Cash $1,000
```
6. **Paid automobile expenses for month, \$375, and miscellaneous expenses, \$250.**
```
Debit: Automobile Expense $375
Debit: Miscellaneous Expense $250
Credit: Cash $625
```
7. **Paid office salaries for the month, \$3,900.**
```
Debit: Salaries Expense $3,900
Credit: Cash $3,900
```
8. **Earned fees that the customer will pay next month, \$2,400.**
```
Debit: Accounts Receivable $2,400
Credit: Service Revenue $2,400
```
9. **Determined that the cost of supplies used was \$280.**
```
Debit: Supplies Expense $280
Credit: Supplies $280
```
10. **Paid dividends, \$2,400.**
```
Debit: Dividends $2,400
Credit: Cash $2,400
```
**Notes:**
- Each entry maintains the accounting equation by ensuring that debits equal credits.
- Accounts like Cash, Common Stock, Rent Expense, Supplies, Accounts Payable, Service Revenue, Accounts Receivable, Salaries Expense, Automobile Expense, Miscellaneous Expense, Supplies Expense, and Dividends are appropriately debited and credited based on the nature of each transaction.
Solution
Certainly! Below are the journal entries for Wickers Restoration Services for the transactions that occurred in May. Each entry includes the accounts debited and credited along with the corresponding amounts.
---
### a. Journal Entries for May
1. **Received \$48,000 from sale of common stock.**
```
Debit: Cash .................................... $48,000
Credit: Common Stock ............................ $48,000
```
2. **Paid rent on office for the month, \$880.**
```
Debit: Rent Expense ............................. $880
Credit: Cash ........................................ $880
```
3. **Purchased supplies on account, \$1,750.**
```
Debit: Supplies .................................. $1,750
Credit: Accounts Payable .......................... $1,750
```
4. **Earned fees, receiving cash, \$12,600.**
```
Debit: Cash .................................... $12,600
Credit: Service Revenue ............................ $12,600
```
5. **Paid creditor on account, \$1,000.**
```
Debit: Accounts Payable .................... $1,000
Credit: Cash ........................................ $1,000
```
6. **Paid automobile expenses for month, \$375, and miscellaneous expenses, \$250.**
```
Debit: Automobile Expense ................... $375
Debit: Miscellaneous Expense .............. $250
Credit: Cash ........................................ $625
```
7. **Paid office salaries for the month, \$3,900.**
```
Debit: Salaries Expense ...................... $3,900
Credit: Cash ........................................ $3,900
```
8. **Earned fees that the customer will pay next month, \$2,400.**
```
Debit: Accounts Receivable ............... $2,400
Credit: Service Revenue ............................ $2,400
```
9. **Determined that the cost of supplies used was \$280.**
```
Debit: Supplies Expense ....................... $280
Credit: Supplies .................................... $280
```
10. **Paid dividends, \$2,400.**
```
Debit: Dividends ................................ $2,400
Credit: Cash ........................................ $2,400
```
---
**Notes:**
- **Debits and Credits:** In each journal entry, the total debits equal the total credits, maintaining the accounting equation's balance.
- **Accounts Explained:**
- **Cash:** Asset account increasing with debits and decreasing with credits.
- **Common Stock:** Equity account; issuing stock increases equity.
- **Rent Expense, Salaries Expense, Automobile Expense, Miscellaneous Expense, Supplies Expense:** Expense accounts reducing equity.
- **Supplies:** Asset account; purchasing supplies increases assets, using supplies decreases assets.
- **Accounts Payable:** Liability account; purchasing on account increases liabilities, paying reduces them.
- **Service Revenue:** Revenue account increasing equity.
- **Accounts Receivable:** Asset account representing money to be received.
- **Dividends:** Distribution to shareholders, reducing retained earnings (equity).
Ensure that these entries are posted to the general ledger accordingly to maintain accurate financial records.
Reviewed and approved by the UpStudy tutoring team
Explain
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