Jarrod Automotive, Owned and Operated by Jarrod Johnson, Began Business

question 59

Essay

Jarrod Automotive, owned and operated by Jarrod Johnson, began business in September of the current year. Jarrod, a mechanic, had no experience with recording business transactions. As a result, Jarrod entered all of September's transactions directly into the ledger accounts. When he tried to locate a particular entry he found it confusing and time consuming. He has hired you to improve his accounting procedures. The accounts in his General Ledger follow:
Prepare the general journal entries, in chronological order (a) through (e), from the T-account entries shown. Include a brief description of the probable nature of each transaction.

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Definitions:

Overtime Rate

The increased pay rate employers are required to pay employees for hours worked beyond the standard workweek, typically 1.5 times the regular hourly rate.

Net Pay

The amount of an employee's salary that remains after deducting taxes and other statutory deductions.

Gross Pay

The total amount of an employee's earnings before any deductions or taxes are applied.

Federal Income Tax

The federal government's imposition of a financial charge on the yearly profits of individuals, corporations, trusts, and different legal organizations.