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23E

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Horngren'S Financial And Managerial Accounting
Found in: Page 96

Short Answer

Question: Preparing a trial balance from T-accounts

The T-accounts of McMahon Farm Equipment Repair follow as of May 31, 2018.

ASSETS Salaries Payable LIABILITIES EQUITY Retained Earnings 4,000 29,000 Notes Payable 3,500 400 Accounts Receivable 14,000 Land 29,000 Building 16,000 Equipment Common Stock Contributed Capital Dividends Property Tax Expense 1,000 Advertising Expense 280

Cash 31,000 1,800 400 14,000 4,200 800 4,000 2,000 3,380

Service Revenue 3,500 1,800 4,200 31,000 2

The total forthe debit side and credit side is $80,700

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Computation of Cash Balance

Step 2: Preparation of Trial Balance

McMahon Farm Equipment Repair

Trial Balance

May 31, 2018

Account title

Debit ($)

Credit ($)

Cash

$9,020

Accounts Receivables

$3,100

Land

$14,000

Building

$29,000

Equipment

$16,000

Salaries Payable

$3,400

Notes Payable

$25,000

Common Stock

$47,000

Dividends

$2,000

Service Revenue

$5,300

Salaries Expense

$6,300

Property Tax Expense

$1,000

Advertising Expense

$280

Total

$80,700

$80,700

Most popular questions for Business-studies Textbooks

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions:

Cash 11,000

Office Supplies 400

Accounts Receivable 16,500

Land 30,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 52,300

Dividends 0

Rent Expense 800

Salaries Expense 5,600

Service Revenue 8,200

Total Balance $ 64,300 64,300

During April, the business completed the following transactions:

Apr. 4 Collected $2,500 cash from a client on account.

8 Performed tax services for a client on account, $5,400.

13 Paid $3,000 on account.

14 Purchased furniture on account, $3,600.

15 Merry contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of $9,500.

18 Purchased office supplies on account, $900.

19 Received $2,700 for tax services performed on April 8.

20 Paid cash dividends of $6,500.

21 Received $5,700 cash for consulting work completed.

24 Received $2,400 cash for accounting services to be completed next month.

27 Paid office rent, $600.

28 Paid employee salary, $1,700.

Requirements

  1. Record the April transactions in the journal. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Furniture; Automobile; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; and Rent Expense. Include an explanation for each entry

Journalizing transactions, posting to T-accounts, and preparing a trial balance

Problem P2-42 continues with the company introduced in Chapter 1, Canyon Canoe Company. Here you will account for Canyon Canoe Company’s transactions as it is actually done in practice. Begin by reviewing the transactions from Chapter 1. The transactions have been reprinted below.

Nov. 1 Received $16,000 cash to begin the company and issued common stock to Amber and Zach.

2 Signed a lease for a building and paid $1,200 for the first month’s rent.

3 Purchased canoes for $4,800 on account.

4 Purchased office supplies on account, $750.

7 Earned $1,400 cash for rental of canoes.

13 Paid $1,500 cash for wages.

15 Paid $50 dividends to stockholders.

16 Received a bill for $150 for utilities. (Use separate payable account.)

20 Received a bill for $175 for cell phone expenses. (Use separate payable account.)

22 Rented canoes to Early Start Daycare on account, $3,000.

26 Paid $1,000 on account related to the November 3 purchase.

28 Received $750 from Early Start Daycare for canoe rental on November 22.

30 Paid $100 dividends to stockholders

In addition, Canyon Canoe Company completed the following transactions for December.

Dec. 1 Amber and Zack contributed land on the river (worth $85,000) and a small building to use as a rental office (worth $35,000) in exchange for common stock.

1 Prepaid $3,000 for three months’ rent on the warehouse where the company stores the canoes.

2 Purchased canoes signing a note payable for $7,200

4 Purchased office supplies on account for $500.

9 Received $4,500 cash for canoe rentals to customers.

15 Rented canoes to customers for $3,500, but will be paid next month.

16 Received a $750 deposit from a canoe rental group that will use the canoes next month.

18 Paid the utilities and telephone bills from last month.

19 Paid various accounts payable, $2,000.

20 Received bills for the telephone ($325) and utilities ($295) which will be paid later.

31 Paid wages of $1,800. 31 Paid cash dividend to stockholders, $300.

Requirements

1. Journalize the transactions for both November and December, using the following accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Rent; Land; Building; Canoes; Accounts Payable; Utilities Payable; Telephone Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Canoe Rental Revenue; Rent Expense; Utilities Expense; Wages Expense; and Telephone Expense. Explanations are not required. (Hint: For November transactions, refer to your answer for Chapter 1.)

2. Open a T-account for each of the accounts.

3. Post the journal entries to the T-accounts, and calculate account balances. Formal posting references are not required.

4. Prepare a trial balance as of December 31, 2018.

5. Prepare the income statement of Canyon Canoe Company for the two months ended December 31, 2018.

6. Prepare the statement of retained earnings for the two months ended December 31, 2018.

7. Prepare the balance sheet as of December 31, 2018.

8. Calculate the debt ratio for Canyon Canoe Company at December 31, 2018

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