Reference no: EM132908040

After several months of planning, Jasmine Worthy started a haircutting business called Expressions. The following events occurred during its first month.

a. On August 1, Worthy invested $3,000 cash and $15,000 of equipment in Expressions.

b. On August 2, Expressions paid $600 cash for furniture for the shop.

c. On August 3, Expressions paid $500 cash to rent space in a strip mall for August.

d. On August 4, it purchased $1,200 of equipment on credit for the shop (using a long-term note payable).

e. On August 5, Expressions opened for business. Cash received from haircutting services in the first week and a half of business (ended August 15) was $825.

f. On August 15, it provided $100 of haircutting services on account.

g. On August 17, it received a $100 check for services previously rendered on account.

h. On August 17, it paid $125 to an assistant for hours worked during the grand opening.

i. Cash received from services provided during the second half of August was $930.

j. On August 31, it paid a $400 installment toward principal on the note payable entered into on August 4.

k. On August 31, Worthy withdrew $900 cash for personal use.

Required:

Open the following ledger accounts in T-Account format (account numbers are in parentheses): Cash (101); Accounts Receivable (102); Furniture (161); Store Equipment (165); Note Payable (240); J. Worthy, Capital (301); J. Worthy, Withdrawals (302); Haircutting Services Revenue (403); Wages Expense (623); and Rent Expense (640).

Problem 1. Prepare general journal entries for the transactions.

Problem 2. Post the journal entries from (1) to the ledger accounts.

Problem 3. Prepare a trial balance as of August 31.