Prepare a trial balance provided with the following information: 1. You are begi
ID: 2566116 • Letter: P
Question
Prepare a trial balance provided with the following information:
1. You are beginning a new corporation starting Jan 1st. The company name is (your name) Inc. Enter the transactions listed on the transaction sheet into the general journal. 2. Post the transactions to the general ledger. 3. Prepare a trial balance 4. Journalize the month end adjusting entries in the general journal. Post them to the general ledger. 5. Prepare an adjusted trial balance. 5. Prepare an income statement, retained earnings statement, & balance sheet. 6. Prepare the closing entry in the general journal then post in the general ledger. 7. Prepare a post closing trial balance. Date Transaction 1-Jan Issued 25,000 shares of $1 par common stock for $10 each Hired a receptionist at a salary of $600 payable each week. Purchased $200,000 equipment paying 10% down payment and signed an 8% 10 year note for the remainder , payments will be made on the first of each month beginning in February Set up a $200 petty cash fund Paid $4,800 cash for a 24 month insurance policy effective Jan 1st of this year ( a nominal account was debited) Received $50,000 from clients as an advanced payment for services to be performed (a real account was credited) 7-Jan Paid receptionist weekly salary of $600 Purchased $10,000 of inventory on account terms 2/10, n/30 , the company uses perpetual inventory method Sold merchandise that cost $2,000 to XYZ for $2,900 cash 14-Jan Paid the telephone bill for $120 Sold merchandise that cost $3,000 to ABC for $3,900 terms 1/15, n/30 Paid $5,000 rent for Jan-May (a nominal account was debited) Paid receptionist weekly salary of $600 21-Jan Paid utility bill for $260 Sold merchandise that cost $1,000 on account to DEF company for $1,300 Purchased $ 5400 of supplies for cash ( a real account was debited) ABC returned one third of their earlier purchase ABC paid the total amount due Paid for the inventory purchased on Jan 7th Declared a dividend of $.10 per share to be paid to the owner of record on Jan 28th. The payment date is Jan 31st. Paid receptionist weekly salary of $600 28-Jan Received payment of $800 from DEF company Paid receptionist weekly salary of $600 Purchased $5,ooo of merchandise terms 2/10 n/30 fob destination Sold merchandise that cost $2,000 to PQR for $2,900 cash 31-Jan Replenished the petty cash fund. The balance in the fund was $12. A summary of the the petty cash expenditures is as follows: delivery charges paid on merchandise purchased $60 supplies purchased 25 postage expense 40 miscellaneous expense 59 Paid for the inventory purchased on Jan 28th Paid the dividend delcared on Jan 21st
Explanation / Answer
Journal entrie Date Particulars Debit amount Credit amount 01-Jan Bank A/c………………….Dr 2,50,000 (25000 x 10) To Equity share capital A/c 25,000 To Share premium A/c 2,25,000 (25000*9) (Being Issued 25,000 shares of $1 par common stock for $10 each) 01-Jan Equipment A/c………………….Dr 2,00,000 To Bank A/c 20,000 (200000*10%) To Note payable A/c 1,80,000 (200000*90%) (Being Purchased $200,000 equipment paying 10% down payment and signed an 8% 10 year note for the remainder , payments will be made on the first of each month beginning in February) 01-Jan Petty Cash A/c…………….Dr 200 To Bank A/c 200 (Being Set up a $200 petty cash fund) 01-Jan Insurance A/c……………Dr 200 (4800*1/24) Prepaid Insurance A/c………Dr (4800*23/24) 4,600 To Bank A/c 4,800 (Being cash paid for a 24 month insurance policy effective Jan 1st of this year) 01-Jan Bank A/c…………….Dr 50,000 To Service revenue received in advance 50,000 (Being amount received) from clients as an advanced payment for services to be performed 07-Jan Salary A/c………………….Dr 600 To Bank A/c 600 (Being Paid receptionist weekly salary of $600) 07-Jan Inventory A/c…………………….Dr 10,000 To Creditors A/c 9,800 To Discount received A/c 200 (Purchase of inventory on account terms 2/10, n/30) 07-Jan Bank A/c………………..Dr 2,900 To Sale of Inventory A/c 2,000 To Profit on sale of inventory Ac 900 (Being Sold merchandise that cost $2,000 to XYZ for $2,900 ) 14-Jan Telephone expense A/c…………….Dr 120 To Bank A/c 120 (Being Paid the telephone bill) 14-Jan ABC A/c…………………..Dr 3,900 Discount given A/c……………..Dr 39 To Inventory A/c 3,000 To Profit on sale of inventory Ac 939 (Being Sold merchandise that cost $3,000 to ABC for $3,900 terms 1/15, n/30) 14-Jan Rent A/c………………..Dr 1,000 Prepaid rent A/c………………Dr 4,000 To Bank A/c 5,000 (Being Paid $5,000 rent for Jan-May) 14-Jan Salary A/c………………….Dr 600 To Bank A/c 600 (Being Paid receptionist weekly salary of $600) 21-Jan Utilities A/c……………….Dr 260 To Bank A/c 260 (Being Paid utility bill) 21-Jan DEF A/c………………..Dr 1,300 To Sale of Inventory A/c 1,000 To Profit on sale of inventory Ac 300 (Being Sold merchandise that cost $1,000 on account to DEF company for $1,300) 21-Jan Supplies A/c………………………..Dr 5,400 To Cash A/c 5,400 (Being Purchased supplies) 21-Jan Sales return A/c…………………….Dr 1,300 Bank A/c……………………..Dr 2,561 To ABC A/c 3,861 (Being ABC returned one third of their earlier purchase ABC paid the total amount due Paid for the inventory purchased on Jan 7th) 28-Jan Dividend A/c……………………Dr 2,500 (25000x0.10) To Dividend payable A/c 2,500 ( Declared a dividend of $.10 per share to be paid to the owner of record on Jan 28th.) 28-Jan Salary A/c………………….Dr 600 To Bank A/c 600 (Being Paid receptionist weekly salary of $600) 28-Jan Bank A/c……………..Dr 800 To DEF A/c 800 (Beong Received payment of $800 from DEF company) 28-Jan Inventory A/c…………………….Dr 5,000 To Creditors A/c 4,900 To Discount received A/c 100 (Purchase of inventory on account terms 2/10, n/30) 28-Jan Bank A/c………………..Dr 2,900 To Sale of Inventory A/c 2,000 To Profit on sale of inventory Ac 900 (Being Sold merchandise that cost $2,000 to PQR for $2,900 ) 31-Jan Creditors A/c……………………Dr 4,900 To Bank A/c 4,900 (Being paid fr inventory purchased) 31-Jan Dividend payable A/c…………………..Dr 2,500 To Bank A/c 2,500 (Beng dividends paid) Bank A/c Equipment A/c Date Particulars Debitt Date Particulars Credit Date Particulars Debitt Date Particulars Credit 01-Jan To Equity share capital A/c 25,000 01-Jan By Equipment A/c 20000 01-Jan To Bank A/c 20,000 01-Jan To Share premium A/c 2,25,000 01-Jan By Petty cash 200 01-Jan To Note payable A/c 180000 01-Jan To Service revenue received in advance 50000 01-Jan By Insurance 200 07-Jan To Sale of Inventory A/c 2,000 01-Jan By Prepaid insurance 4600 07-Jan To Profit on sale of inventory Ac 900 01-Jan by Salary 600 21-Jan to ABC A/c 2,561 14-Jan By telephone expenses 120 28-Jan To DEF 800 14-Jan Rent 1,000 Inventory A/c 28-Jan To Sale of Inventory A/c 2,000 14-Jan Prepaid rent 4,000 28-Jan To Profit on sale of inventory Ac 900 14-Jan by Salary 600 Date Particulars Debitt Date Particulars Credit 21-Jan By utilities 260 21-Jan by Suplies 5400 07-Jan To Creditors A/c 9,800 07-Jan By Bank A/c 2000 31-Jan By Dividend 2500 07-Jan To Discount received A/c 200 07-Jan by ABC 3000 28-Jan by salary 600 28-Jan To Creditors A/c 4,900 21-Jan by DEF 1000 31-Jan By creditors 4900 28-Jan To Discount received A/c 100 28-Jan By Bank A/c 2000 31-Jan By balance c/d 7000 15,000 15,000 3,09,161 44,980 Creditors A/c 2,64,181 Date Particulars Debitt Date Particulars Credit 31-Jan To Babk A/c 4900 07-Jan By Inventory A/c 9800 28-Jan By Inventory A/c 4900 Discount recceived A/c Date Particulars Debitt Date Particulars Credit 07-Jan By Inventory A/c 200 28-Jan By Inventory A/c 100