Problem #1: Journalize transactions, prepare ledgers and a trial balance (Show your work)
Mr. Blue is a licensed skin doctor. During the first month of the operation of his business, the
following events and transactions occurred.
· April 1 Invested $20,000 cash in his business.
· 1 Hired a secretary-receptionist at a salary of $700 per week payable monthly.
· 2 Paid office rent for the month $1,100.
· 3 Purchased doctor office’s supplies on account from Dazzle Company $4,000.
· 10 Performed medical services and billed insurance companies $5,100.
· 11 Received $1,000 cash advance from Sebastian for the medical service.
· 20 Received $2,100 cash for services performed from James.
· 30 Paid secretary-receptionist for the month $2,800.
· 30 Paid $2,400 to Dazzle for accounts payable due.
Mr. Blue uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No.
126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 301 Owner’s
Capital, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent
Expense.
(a) Journalize the transactions.
(b) Post to the ledger accounts.
c) Prepare a trial balance on April 30, 2022
Problem #2: Depreciation Methods (Show your work)
Numo Company purchased a new machine on October 1, 2021, at a cost of $145,000. The
company estimated that the machine will have a salvage value of $25,000.The machine is
expected to be used for 20,000 working hours during its 5-year life. Instructions Compute the
depreciation expense under the following methods for the year indicated. (a) Straight-line for
2020. (b) Units-of-activity for 2021, assuming machine usage was 3,400 hours. (c)
Declining-balance using double the straight-line rate for 2021 and 2022.