Page 111 - Accounting Principles (A Business Perspective)

2. Recording business transactions

Alternate problem 4 The trial balance of California Tennis Center, Inc., at the end of the first 11 months of its
fiscal year follows:
CALIFORNIA TENNIS CENTER, INC.
Trial Balance
2010 November 30
Acct.
No. Account Title Debits Credits
100 Cash $71,180
103 Accounts Receivable 81,750
130 Land 60,000
200 Accounts Payable $18,750
201 Notes Payable 15,000
300 Capital Stock 50,000
310 Retained Earnings, 2010 January 1 53,700
413 Membership and Lesson Revenue 202,500
505 Advertising Expense 21,000
507 Salaries Expense 66,000
511 Utilities Expense 2,100
515 Rent Expense 33,000
518 Supplies Expense 2,250
530 Repairs Expense 1,500
531 Entertainment Expense 870
540 Interest Expense 300
$339,950 $339,950
Dec. 1 Paid building rent for December, USD 4,000.
2 Paid vendors on account, USD 18,000.
5 Purchased land for cash, USD 10,000.
7 Sold memberships on account for December, USD 27,000.

10 Paid the note payable of USD 15,000, plus interest of USD 150.
13 Cash collections from customers on account, USD 36,000.
19 Received a bill for repairs, USD 225.
24 Paid the December utilities bill, USD 180.
28 Received a bill for December advertising, USD 1,650.
29 Paid the equipment repair bill received on the 19th, USD 225.
30 Gave tennis lessons for cash, USD 4,500.

30 Paid salaries, USD 6,000.
30 Sales of memberships on account since December 7, USD 18,000 (for the month of December).
30 Costs paid in entertaining customers in December, USD 350.
30 Paid dividends of USD 1,500. (The Dividends account is No. 320.)
a. Open three-column general ledger accounts for each of the accounts in the trial balance. Place the word
Balance in the explanation space and enter the date 2010 December 1, on this same line. Also open an account for
Dividends, No. 320.
b. Prepare entries in the general journal for the transactions during December 2010.
c. Post the journal entries to ledger accounts.

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