Prepare a Trial Balance of the transactions below. May use T-Accounts, ledger tr
ID: 2455319 • Letter: P
Question
Prepare a Trial Balance of the transactions below. May use T-Accounts, ledger tracking or any other method to summarize the ending balance.
John's Catering was formed on January 1, 2015. The following transactions occurred during John's first month of operations:
Prepare a Trial Balance of the transactions below. May use T-Accounts, ledger tracking or any other method to summarize the ending balance.
John's Catering was formed on January 1, 2015. The following transactions occurred during John's first month of operations:
1. On January 1, John invests $10,000 cash as a contribution of capital to start his business. 2. On January 1, John borrows $5,000 from the local bank to be repaid in 3 years. The cash is received on the same day. 3. On January 2, John pays $50 cash for liability insurance for the month of January. 4. On January 3, John purchases $5,000 in cooking equipment for use in his business. The sale was made on account. Assume no depreciation. 5. On January 4, John receives $500 cash for a catering service to be performed at a later date. 6. On January 6, John performs a catering service worth $2,250 - the sale occurred on account. 7. On January 9, John purchases $50 in supplies on account that were consumed in the current period 8. On January 24, the invoice is paid for transaction #4. 9. On January 25, John makes an interest only payment of $50 for the loan mentioned in #2. The interest is for the month of January. 10. On January 25, John performs a service for $200 and the cash payment is immediately received. 11. On January 26, John purchases $25 worth of supplies for use in a future period. Cash was paid for these supplies. 12. On January 29, John performs the service from transaction #5. 13. On January 27, John collects a portion ($500) of the amount owed for the service performed in #6. 14. On January 31, John pays his employees $2,825 in cash for work performed January 1 - January 31. 15. On January 31, John Smith pays $100 in cash for an insurance policy that begins Febuary 1.Explanation / Answer
Solution:
Debit Credit Cash 8,150 John's Capital 10,000 Loan from Bank 5,000 Insurance Expense 50 Cooking Equipment 5,000 Accounts Payable 50 Services 2,950 Accounts Receivables 1750 Supplies 75 Interest on Loan 50 Salary Expense 2,825 Insurance policy expense 100 Total 18,000 18,000