Milo Clothing experienced the following events during 2016, its first year of op
ID: 2423420 • Letter: M
Question
Milo Clothing experienced the following events during 2016, its first year of operation:
4. Paid $1,500 for advertising expense.
Record the general journal entries for the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. Post each of the entries into T-accounts.
c. Prepare a trial balance to prove the equality of debits and credits.
1. Acquired $30,000 cash from the issue of common stock. 2. Purchased inventory for $15,000 cash. 3. Sold inventory costing $9,000 for $20,000 cash. 4.4. Paid $1,500 for advertising expense.
a.Record the general journal entries for the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. Post each of the entries into T-accounts.
c. Prepare a trial balance to prove the equality of debits and credits.
Explanation / Answer
JOURNAL ENTRY
1. Cash a/c.........................................................$30000
To common stock a/c.......................................................$30000
2.Inventory a/c..............................................................$15000
To Cash a/c.....................................................................$15000
3.Cash a/c.......................................................................$20000
To inventory a/c............................................................$9000
To profit on sale of inventr a/c......................................$11000
4. Advertisement expenses a/c........................................$1500
To cash.................................................................$1500
Dr. Cash a/c Cr.
$33500
common stock a/c
Inventory a/c
advertisement expense a/c
Trial Balance
Particular amount particular amount To common stock a/c $30000 By inventory a/c $15000 To inventory a/c $9000 By advertisement expenses a/c $1500 To P/L a/c $11000 By balance b/d$33500
total $50000 total $50000