1. Use the general journal to journalize the following transactions completed during July of the current year.
2. Post from the general journal to the general ledger. Using the following steps.
a. A. Write the current year and July 1 in the Date column. (The account title, Cash, and account number, 110, have already been recorded in the heading of this page.)
b. Write the word Balance in the Item column.
c. Place a check mark in the Post. Ref. column to indicate that this entry is forwarded from a previous page, rather than posted from the general journal.
d. Write the debit balance amount in the Balance Debit column for your Assets and Net Asset accounts. Place the credit amount in the Liability accounts.
e. Follow this procedure whenever it is necessary to open a new page for a general ledger account.
3. Prepare a report using the information from the general ledger. The report is provided on the first page of the template spreadsheet.
4. On July 28, John Doe, M.D., received a bank statement dated July 26. The following information is obtained form the bank statement and from the records of the business. Prepare a bank statement reconciliation. Use the form listed in the template packet.
a. Bank Statement balance as of July 26….$4,453.00
b. Outstanding deposits:
July 26………………………………………………….. 345.00
July 27………………………………………………….. 300.00
Outstanding checks:
Nos. 21, 23, 24, 25, and 26
Bank service charge……………………………. 15.00
Checkbook balance on $4,250.00
Check Stub No. 27
5. Prepare trial balance from information presented on ledgers.
6. Prepare income statement.
7. Answer the following questions…
a. Was the office profitable during the month of July?
b. What would you suggest to the office manager to curb expenses and boost revenue?
c. What strategies would you use to ensure your Accounts Receivables balances observed?
1. To journalize the transactions completed during July of the current year, you would need to follow these steps:
- Identify the transactions that occurred during July.
- Determine the accounts affected by each transaction (e.g., Cash, Accounts Receivable, Revenue, Expenses).
- Determine if the transaction increases or decreases the account balance.
- Use the general journal format to record each transaction, including the date, account titles, and dollar amounts.
2. To post from the general journal to the general ledger, you would follow these steps:
- Start by opening the general ledger accounts for each relevant account.
- Record the date and a brief description of the transaction in the Date and Item columns, respectively.
- Determine if the entry is brought forward from a previous page or posted from the general journal.
- Record the debit amount in the Balance Debit column for asset and net asset accounts and the credit amount for liability accounts.
- Follow this procedure whenever a new page is needed for a general ledger account.
3. To prepare a report using the information from the general ledger, you would follow these steps:
- Start by organizing the general ledger accounts in a systematic manner.
- Group the accounts into categories, such as assets, liabilities, equity, revenue, and expenses.
- Calculate the balances for each account by adding up the debits and credits.
- Transfer the balances to the template spreadsheet, following the provided report format.
4. To prepare a bank statement reconciliation, you would follow these steps:
- Start by comparing the bank statement balance as of July 26 to the checkbook balance listed on the check stub.
- Identify any outstanding deposits and outstanding checks from the bank statement.
- Add the outstanding deposits to the bank statement balance and subtract the outstanding checks.
- Consider any bank service charges and adjust the balance accordingly.
- Compare the adjusted bank statement balance to the checkbook balance to ensure they match.
5. To prepare a trial balance from the information presented on ledgers, you would follow these steps:
- List all the accounts from the general ledger, categorizing them as assets, liabilities, equity, revenue, or expenses.
- Enter the debit balance in the debit column and the credit balance in the credit column for each account.
- Calculate the total debits and credits and ensure they balance.
6. To prepare an income statement, you would follow these steps:
- Begin with the revenue accounts and enter the total revenue earned during the month.
- Subtract any expenses incurred during the month.
- Calculate the net income (or loss) by subtracting total expenses from total revenue.
- Present the income statement in a format that clearly shows revenue, expenses, and net income (or loss).
7. To answer the following questions:
a. Was the office profitable during the month of July?
- You would need to refer to the income statement prepared in step 6 to determine if the office had a net income or net loss during July.
b. What would you suggest to the office manager to curb expenses and boost revenue?
- To curb expenses, you could suggest implementing cost-cutting measures, negotiating better deals with suppliers, or improving operational efficiency.
- To boost revenue, you could suggest increasing marketing efforts, exploring new markets or customer segments, or introducing new products/services.
c. What strategies would you use to ensure your Accounts Receivables balances observed?
- To ensure Accounts Receivable balances are observed, you could implement a robust credit control process, including timely and accurate invoicing, clear payment terms, and regular follow-up on outstanding invoices.
- You could also consider offering incentives for early payment, conducting credit checks on new customers, and establishing a relationship with a collection agency for overdue accounts.