Grete Ropewalk formed a dog grooming and training business called Grete Koninis on September 1, 2014. After consulting
Grete Ropewalk formed a dog grooming and training business called Grete Koninis on September 1, 2014. After consulting with a friend who had taken introductory accounting, Grete created a chart of accounts for the business as follows: No. 101 Cash; No. 112 Accounts Receivable; No. 130 Prepaid Insurance; No. 151 Equipment;
No. 201 Accounts Payable; No. 209 Unearned Revenue; No. 301 G. Ropewalk, Capital; No. 306 G. Ropewalk,
Drawings; No. 400 Service Revenue; No. 610 Advertising Expense; No. 726 Rent Expense; and No. 737 Utilities Expense. During September, the following events and transactions occurred:
Sept. 1 Grete transferred $9,000 from her personal bank account to a bank account under the company name, Grete Koninis.
1. Signed a one-year rental agreement for $650 per month. Paid the first month's rent.
2. Paid $720 for a one-year insurance policy effective September 1, 2014.
3. Purchased $2,500 of equipment on credit.
6. Paid $450 for advertising in several community newsletters in September.
15. Collected $500 cash for providing dog grooming services.
19. Attended a dog show and provided $700 of dog grooming services for one of the major kennel owners.
The kennel owner will pay the amount owing within two weeks.
24 Collected $500 from the kennel owner for the services provided on September 19. Th e kennel owner promised to pay the rest on October 2.
25. Paid $175 for utilities for the month of September.
26. Paid $1,500 of the amount owed from the September 3 equipment purchase.
29. Received $850 cash for dog training lessons that will start on October 7.
30. Collected $975 cash for providing dog grooming services.
30. Paid the owner, Grete Rodewald, $1,350 for her personal use.
(a) Journalize the transactions.
(b) Post to the ledger accounts. Use the standard form of account.
(c) Prepare a trial balance as at September 30, 2014.
TAKING IT FURTHER Grete thinks she needs only one account for investments, drawings, revenues, and expense because these are all owners' equity accounts. Explain to her why she needs separate accounts.