Seth opened a bookstore on April 1, 2011, selling new and used books. Seth contr

Question

Seth opened a bookstore on April 1, 2011, selling new and used books. Seth contributed $3,600 in exchange for common stock to start the business, Seth's Books. The company had the following transactions:

1. On April 1, the company bought $4,500 of new books from its supplier with cash.

2. On April 30, customers brought in used books and the company purchased them for $650 Cash.

3. On June 30, $3,500 of new books were sold for $5,500. Half of these sales were on account.

4. On June 30, the company sold all the used books for $1,600 cash.

Requirement 1: Record each transaction into T-accounts for the new company. Calculate the account balances and prepare an unadjusted trial balance at June 30, 2011.

Explanation / Answer

t- Accounts Cash a/c debit Credit 1-Apr 3,600 april 4,500 30-Jun 2,750 30-Apr 650 30-Jun 1,600 baalnce 2,800 Common Stock debit credit 1-Apr 3,600 balance 3,600 inventory - books new 1-Apr 4,500 30-Jun 3,500 balance 1,000 inventory - books -used 30-Jun 650 30-Jun 650 Sales A/c debti credit 30-Jun 5,500 30-Jun 1,600 balance 7,100 Account receivable 30-Jun 2,750 baalnce 2,750 Cost of goods sold 30-Jun 3,500 30-Jun 650 balance 4,150 Unadjusted Trial balance Cash 2,800 common stock 3,600 inventory 1,000 Sales 7,100 account receivable 2,750 cost of goods sold 4,150 total 10,700 10,700

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