On July 1 2006 Leon Cruz established an interior

decorating
On July 1, 2006, Leon Cruz established an interior decorating business, Ingres Designs. During
the remainder of the month, Leon Cruz completed the following transactions related to the
business: July 1 Leon transferred cash from a personal bank account to an account to be used
for the business in exchange for capital stock, $18,000.5 Paid rent for the period of July 5 to the
end of the month, $1,500.10 Purchased a truck for $15,000, paying $5,000 cash and giving a
note payable for the remainder.13 Purchased equpment on account, $4,500.14 Purchased
supplies for cash, $975.15 Paid annual premiums on property and casualty insurance,
$3,000.15 Received cash for job completed, $4,100.21 Paid creditor a portion of the amount
owed for equipment purchased on July 13, $2,400.24 Recorded jobs completed on account and
sent invoices to customers, $6,100.26 Received an invoice for truck expenses, to be paid in
August, $580.27 Paid utilities expense, $950.27 Paid miscellaneous expense, $315.29
Received cash from customers on account, $3,420.30 Paid wages of employees, $2,500.31
Paid dividends, $2,000.Instructions1. Journalize each transaction in a two-column journal,
referring to the following chart of accounts in selecting the accounts to be debited and
credited.Cash ............ Capital StockAccounts Receivable ....... DividendsSupplies .......... Fees
EarnedPrepaid Insurance ....... Wages ExpenseEquipment ......... Rent ExpenseTruck ...........
Utilities ExpenseNotes Payable ......... Truck ExpenseAccounts Payable ....... Miscellaneous
Expense2. Post the journal to a ledger of T accounts. For accounts with more than one posting,
determine the account balance.3. Prepare a trial balance for Ingres Designs as of July 31,
2006.View Solution:
On July 1 2006 Leon Cruz established an interior decorating
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