CrossCountry Movers had the following account balances, in random order, on

December 15, 2017 (all accounts have their “normal” balances):

The following events took place during the final weeks of the year:

Dec. 16 The accountant discovered that an error had been made in posting an entry to the Moving Fees Income account. The entry was correctly journalized, but $2,400 was accidentally posted as $4,200 in the account.

17 Moved a customer’s goods to CrossCountry’s rented warehouse for storage. The moving fees were $4,000. Storage fees are $600 per month. The customer was billed for one month’s storage and the moving fees.

18 Collected a $15,000 note owed to CrossCountry Movers and collected interest income of $1,800 cash.

19 Used a company cheque to pay for Martinez’s hydro bill in the amount of $400.

21 Purchased storage racks for $12,000. Paid $3,600 cash, provided moving services for $1,500, and promised to pay the balance in 60 days.

23 Collected $3,000 cash; $2,600 of this was for moving goods on December 15 (recorded as an account receivable at that time) and the balance was for storage fees for the period of December 16 to 23.

24 CrossCountry Movers paid cash of $18,000 owing on the mortgage.

27 Martinez withdrew $5,000 cash for personal use.

29 Provided moving services to a lawyer for $2,400. The lawyer paid CrossCountry Movers $1,500 and provided legal work for the balance.

31 Martinez, the owner of CrossCountry Movers, sold 2,000 shares he held in Brandon Haulage Inc. for $12,000.

Required

1. Where appropriate, record each transaction from December 16 to 31 in the journal. Include an explanation for each journal entry.

2. Post entries in T-accounts and calculate the balance of each one.

3. Prepare the unadjusted trial balance of CrossCountry Movers at December 31, 2017.

SOLUTION

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Req. 1

Journal
DATE 2017	DATE 2017	ACCOUNT TITLES AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
Dec.	17	Accounts Receivable		4,600
		Moving Fees Income			4,000
		Storage Fees Income			600
		Earned moving fees and one month’s storage fees on account.
	18	Cash		16,800
		Notes Receivable			15,000
		Interest Income			1,800
		Collected a note receivable and the related interest income.
	19	H. Martinez, Withdrawals		400
		Cash			400
		To record payment of hydro bill belonging to H. Martinez.
	21	Storage Equipment		12,000
		Cash			3,600
		Moving Fees Income			1,500
		Accounts Payable			6,900
		Purchased storage racks and paid for them partly with cash, moving fees provided, and the remainder on Accounts Payable.
	23	Cash		3,000
		Accounts Receivable			2,600
		Storage Fees Income			400
		To record cash collected on account and for storage fees.
	24	Mortgage Payable		18,000
		Cash			18,000
		To record cash payment on the mortgage.
	27	H. Martinez, Withdrawals		5,000
		Cash			5,000
		To record owner withdrawal of cash.

CrossCountry Movers

Journal
DATE 2017	DATE 2017	ACCOUNT TITLES AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
Dec.	29	Cash		1,500
		Legal Expense		900
		Moving Fees Income			2,400
		Moving services provided for cash and $900 of legal work.
	31	No Entry

CrossCountry Movers

Req. 2

Cash	Cash	Cash	Cash	Cash	Cash	Accounts Receivable	Accounts Receivable	Accounts Receivable	Accounts Receivable	Accounts Receivable	Accounts Receivable
Dec.	15	17,200	Dec.	19	400	Dec.	15	17,400	Dec.	23	2,600
	18	16,800		21	3,600		17	4,600
	23	3,000		24	18,000	Bal.		19,400
	29	1,500		27	5,000
Bal.		11,500

Notes Receivable	Notes Receivable	Notes Receivable	Notes Receivable	Notes Receivable	Notes Receivable		Office Supplies	Office Supplies	Office Supplies	Office Supplies	Office Supplies	Office Supplies
Dec.	15	45,000	Dec.	18	15,000		Dec.	15	9,600
Bal.		30,000

Office Equipment	Office Equipment	Office Equipment	Office Equipment	Office Equipment	Office Equipment		Moving Equipment	Moving Equipment	Moving Equipment	Moving Equipment	Moving Equipment	Moving Equipment
Dec.	15	12,300					Dec.	15	132,200

Storage Equipment	Storage Equipment	Storage Equipment	Accounts Payable	Accounts Payable	Accounts Payable
Dec.	15	12,000	Dec.	15	33,000
				21	6,900
			Bal.		39,900

Mortgage Payable	Mortgage Payable	Mortgage Payable	Mortgage Payable	Mortgage Payable	Mortgage Payable		H. Martinez, Capital	H. Martinez, Capital	H. Martinez, Capital	H. Martinez, Capital	H. Martinez, Capital	H. Martinez, Capital
Dec.	14	18,000	Dec.	15	39,000					Dec.	15	63,000
			Bal.		21,000

H. Martinez, Withdrawals	H. Martinez, Withdrawals	H. Martinez, Withdrawals	Moving Fees Income	Moving Fees Income	Moving Fees Income
Dec.	19	400	Dec.	15	259,800*
	27	5,000		17	4,000
Bal.		5,400		21	1,500
				29	2,400
			Bal.		267,700

*Corrected for error on Dec. 16

Storage Fees Income	Storage Fees Income	Storage Fees Income	Interest Income	Interest Income	Interest Income
Dec.	15	57,900	Dec.	18	1,800
	17	600
	23	400
Bal.		58,900

Insurance Expense	Insurance Expense	Insurance Expense	Insurance Expense	Insurance Expense	Insurance Expense		Legal Expense	Legal Expense	Legal Expense	Legal Expense	Legal Expense	Legal Expense
Dec.	15	6,300					Dec.	29	900

Office Supplies Expense	Office Supplies Expense	Office Supplies Expense	Office Supplies Expense	Office Supplies Expense	Office Supplies Expense		Rent Expense	Rent Expense	Rent Expense	Rent Expense	Rent Expense	Rent Expense
Dec.	15	2,100					Dec.	15	47,100

Salaries Expense	Salaries Expense	Salaries Expense	Salaries Expense	Salaries Expense	Salaries Expense		Utilities Expense	Utilities Expense	Utilities Expense	Utilities Expense	Utilities Expense	Utilities Expense
Dec.	15	161,100					Dec.	15	2,400

Req. 3

Cross Country Movers
Unadjusted Trial Balance
December 31, 2017
ACCOUNT	DEBIT	CREDIT
Cash	$ 11,500
Accounts receivable	19,400
Notes receivable	30,000
Office supplies	9,600
Office equipment	12,300
Moving equipment	132,200
Storage equipment	12,000
Accounts payable		$ 39,900
Mortgage payable		21,000
H. Martinez, capital		63,000
H. Martinez, withdrawals	5,400
Moving fees income		267,700
Storage fees income		58,900
Interest earned		1,800
Insurance expense	6,300
Legal expense	900
Office supplies expense	2,100
Rent expense	47,100
Salaries expense	161,100
Utilities expense	2,400
Total	$452,300	$452,300

CrossCountry Movers had the following account balances, in random order, on — December 2017 all accounts have their normal

Required

SOLUTION

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