Reference no: EM133246902

Introduction

The accounting process consists of various interconnected steps. In this activity, you will perform three crucial steps of the accounting cycle-preparing a journal, ledger accounts, and a trial balance.

Directions and Analysis Task 1: Classify the following accounting heads for Nikea Inc. as assets, liabilities, incomes, expenses, and equity: cash, capital stock, accounts receivable, dividends received, automobile expense, supplies, sales commissions, supplies expense, office salaries, miscellaneous expense, rent, accounts payable

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Task 2: Record the listed transactions of Nikea Inc. for the first quarter (January to March) in a journal.

A. 01-02-2015 issued capital stock: $20,000

B. 01-30-2015 paid the monthly rent: $5,000

C. 02-02-2015 purchased supplies on account: $1,500

D. 02-10-2015 paid a creditor on account: $1,000

E. 03-03-2015 earned sales commissions: $25,000

F. 03-30-2015 paid automobile expenses for the month: $4,500

G. 03-30-2015 paid office salaries: $8,000

H. 03-31-2015 determined the cost of supplies used: $1,500

I. 03-31-2015 paid cash dividends: $1,500

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Task 3: create ledger accounts for cash, equity, supplies, accounts payable, sales commission, automobile expense, office salaries, supplies expense, rent expense, and dividend expense. Also, create a trial balance based on the journal entries.

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