Required information Problem 2-2 Accounting cycle through unadjusted trial balan

Question

Required information Problem 2-2 Accounting cycle through unadjusted trial balance LO2-2, 2-3] [The following information applies to the questions displayed below.] The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2017 Account Title Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Accounts payable Common stock Retained earnings Sales revenue Cost of goods sold salaries and wages expense Rent expense Advertising expense Debits Credits 5,000 2,000 5,000 11,000 3,500 3,000 10,000 6,500 Totals 23,000 23,000 The following transactions occurred during January 2018: Jan. 1 Sold merchandise for cash, $3,500. The cost of the merchandise was $2,000. The company uses the perpetual inventory sys 2 Purchased equipment on account for $5,500 from the Strong Company. 4 Received a $150 invoice from the local newspaper requesting payment for an advertisement that Whitlow tem. placed in the paper on January 2. 8 Sold merchandise on account for $5,000. The cost of the merchandise was $2,800 10 Purchased merchandise on account for $9,500. 13 Purchased equipment for cash, $800 16 Paid the entire amount due to the Strong Company. 18 Received $4,000 from customers on account.

Explanation / Answer

Answer

---Unadjusted Balances of Assets:

Transaction/Date

Cash

Accounts receivables

Inventory

Equipment

Accumulated Depreciation - Equipment

Beginning Balance

$               5,000.00

$                     2,000.00

$            5,000.00

$         11,000.00

$             3,500.00

Jan-01

$               3,500.00

$        (2,000.00)

Jan-02

$           5,500.00

Jan-04

Jan-08

$                     5,000.00

$         (2,800.00)

Jan-10

$            9,500.00

Jan-13

$                (800.00)

$               800.00

Jan-16

$            (5,500.00)

Jan-18

$               4,000.00

$                  (4,000.00)

Jan-20

$                (800.00)

Jan-30

$            (3,000.00)

Jan-31

$            (1,000.00)

Ending Unadjusted balance

$               1,400.00

$                     3,000.00

$            9,700.00

$         17,300.00

$             3,500.00

---Unadjusted Balance of Liabilities & Equities

Transaction/Date

Accounts Payable

Common Stock

Retained Earnings

Beginning Balance

$               3,000.00

$                  10,000.00

$            6,500.00

Jan-01

Jan-02

$               5,500.00

Jan-04

$                  150.00

Jan-08

Jan-10

$               9,500.00

Jan-13

Jan-16

$            (5,500.00)

Jan-18

Jan-20

Jan-30

Jan-31

Ending Unadjusted balance

$            12,650.00

$                  10,000.00

$            6,500.00

---Unadjusted Balance of Revenues & Expenses

Transaction/Date

Sales Revenue

Cost of Goods Sold

Salaries & Wages Expenses

Rent Expenses

Advertising Expenses

Dividends

Jan-01

$               3,500.00

$                     2,000.00

Jan-02

Jan-04

$                 150.00

Jan-08

$               5,000.00

$                     2,800.00

Jan-10

Jan-13

Jan-16

Jan-18

Jan-20

$               800.00

Jan-30

$            3,000.00

Jan-31

$          1,000.00

Ending Unadjusted balance

$               8,500.00

$                     4,800.00

$            3,000.00

$               800.00

$                 150.00

$          1,000.00

Trial Balance – January 31, 2018

Accounts title

Unadjusted Trial Balance

Debit

Credit

Cash

$      1,400.00

Accounts receivables

$      3,000.00

Inventory

$      9,700.00

Equipment

$    17,300.00

Accumulated Depreciation - Equipment

$                3,500.00

Accounts Payable

$              12,650.00

Common Stock

$              10,000.00

Retained Earnings [See note below]

$                6,500.00

Dividends [See note below]

$      1,000.00

Sales Revenue

$                8,500.00

Cost of Goods Sold

$      4,800.00

Salaries & Wages Expenses

$      3,000.00

Rent Expenses

$          800.00

Advertising Expenses

$          150.00

TOTAL

$    41,150.00

$              41,150.00

---Note : Alternatively, Dividends shown above can be adjusted in Retained Earnings which will make Retained earnings balance $ 5,500, and then Dividends need not to be shown [This is mentioned because your data is not showing ‘Dividend’ account in Trial balance.

Transaction/Date

Cash

Accounts receivables

Inventory

Equipment

Accumulated Depreciation - Equipment

Beginning Balance

$               5,000.00

$                     2,000.00

$            5,000.00

$         11,000.00

$             3,500.00

Jan-01

$               3,500.00

$        (2,000.00)

Jan-02

$           5,500.00

Jan-04

Jan-08

$                     5,000.00

$         (2,800.00)

Jan-10

$            9,500.00

Jan-13

$                (800.00)

$               800.00

Jan-16

$            (5,500.00)

Jan-18

$               4,000.00

$                  (4,000.00)

Jan-20

$                (800.00)

Jan-30

$            (3,000.00)

Jan-31

$            (1,000.00)

Ending Unadjusted balance

$               1,400.00

$                     3,000.00

$            9,700.00

$         17,300.00

$             3,500.00

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