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(Solution) - Lummus Management Services opens for business and completes thes

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Lummus Management Services opens for business and completes these transactions in September.
Sept. 1 Rhonda Lummus, the owner, invests $28,000 cash along with office equipment valued at $25,000 in the company.
2 The company prepaid $10,500 cash for 12 months? rent for office space. (Hint: Debit Prepaid Rent for $10,500.)
4 The company made credit purchases for $9,000 in office equipment and $1,200 in office supplies. Payment is due within 10 days.
8 The company completed work for a client and immediately received $2,600 cash.
12 The company completed a $13,400 project for a client, who must pay within 30 days.
13 The company paid $10,200 cash to settle the payable created on September 4.
19 The company paid $5,200 cash for the premium on an 18-month insurance policy.
22 The company received $7,800 cash as partial payment for the work completed on September 12.
24 The company completed work for another client for $1,900 on credit.
28 Lummus withdrew $5,300 cash from the company for personal use.
29 The company purchased $1,700 of additional office supplies on credit.
30 The company paid $460 cash for this month?s utility bill.

1. Prepare general journal entries to record these transactions (use account titles listed in part 2).
2. Open the following ledger accounts ? their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); R. Lummus, Capital (301); R. Lummus, Withdrawals (302); Service Fees Earned (401); and Utilities Expense (690). Post journal entries from part 1 to the ledger accounts and enter the balance after each posting.
3. Prepare a trial balance as of the end of September.


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This question was answered on: Jul 11, 2017

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