The following is the post-closing trial balance for the Whitlow Manufacturing Co
ID: 2540040 • Letter: T
Question
The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2017.
Account Title
Debits
Credits
Cash
5,000
Accounts receivable
2,000
Inventory
5,000
Equipment
11,000
Accumulated depreciation—equipment
3,500
Accounts payable
3,000
Common stock
10,000
Retained earnings
6,500
Sales revenue
–0–
Cost of goods sold
–0–
Salaries and wages expense
–0–
Rent expense
–0–
Advertising expense
–0–
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 system.
2
Purchased equipment on account for $5,500 from the Strong Company.
4
Received a $150 bill from the local newspaper for an advertisement that appeared 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.
20
Paid $800 to the owner of the building for January’s rent.
30
Paid employees $3,000 for salaries and wages for the month of January.
31
Paid a cash dividend of $1,000 to shareholders.
Required:
Set up T-accounts and enter the beginning balances as of January 1, 2018.
Prepare general journal entries to record each transaction. Omit explanations.
Post the entries to T-accounts.
Prepare an unadjusted trial balance as of January 31, 2018
Account Title
Debits
Credits
Cash
5,000
Accounts receivable
2,000
Inventory
5,000
Equipment
11,000
Accumulated depreciation—equipment
3,500
Accounts payable
3,000
Common stock
10,000
Retained earnings
6,500
Sales revenue
–0–
Cost of goods sold
–0–
Salaries and wages expense
–0–
Rent expense
–0–
Advertising expense
–0–
Totals
23,000
23,000
Explanation / Answer
T-accounts and the beginning balances as of January 1, 2018 is as shown below:
general journal entries to record each transaction is as prepared below:
Entries posted to T-accounts are as shown below:
Unadjusted Trial Balance is as prepared below:
Cash Particulars Amount Particulars Amount Opening Balance 5,000 5,000 0 Closing Balance 5,000 Account Receivable Particulars Amount Particulars Amount Opening Balance 2,000 2,000 0 Closing Balance 2,000 Inventory Particulars Amount Particulars Amount Opening Balance 5,000 5,000 0 Closing Balance 5,000 Equipment Particulars Amount Particulars Amount Opening Balance 11,000 11,000 0 Closing Balance 11,000 Accumulated depreciation Particulars Amount Particulars Amount Opening Balance 3,500 3,500 Closing Balance 3,500 Accounts Payable Particulars Amount Particulars Amount Opening Balance 3,000 3,000 Closing Balance 3,000 Common Stock Particulars Amount Particulars Amount Opening Balance 10,000 10,000 Closing Balance 10,000 Retained Earnings Particulars Amount Particulars Amount Opening Balance 6,500 6,500 Closing Balance 6,500 Sales Revenue Particulars Amount Particulars Amount Opening Balance 0 0 Closing Balance 0 Cost of goods sold Particulars Amount Particulars Amount Opening Balance 0 0 0 Closing Balance 0 Salaries and Wages Expense Particulars Amount Particulars Amount Opening Balance 0 0 0 Closing Balance 0 Rent Expense Particulars Amount Particulars Amount Opening Balance 0 0 0 Closing Balance 0 Advertising Expense Particulars Amount Particulars Amount Opening Balance 0 0 0 Closing Balance 0Related Questions
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