Halogen Laminated Products Company began business on January 1, 2021. During January, the following transactions occurred:
Jan. 1 Issued common stock in exchange for $115,000 cash.
2 Purchased inventory on account for $30,000 (the perpetual inventory system is used).
Paid an insurance company $1,800 for a one-year insurance policy. Prepaid insurance was debited for the entire amount.
10 Sold merchandise on account for $11,500. The cost of the merchandise was $6,500.
15 Borrowed $25,000 from a local bank and signed a note. Principal and interest at 108 is to be repaid in six months.
20 Paid employees $5,500 salaries for the first half of the month.
22 Sold merchandise for $9,500 cash. The cost of the merchandise was $5,500.
24 Paid $14,500 to suppliers for the merchandise purchased on January 2.
26 Collected $5,750 on account from customers.
28 Paid $1,000 to the local utility company for January gas and electricity.
30 Paid $3, 500 rent for the building. $1,750 was for January rent, and $1,750 for February rent. Prepaid rent and rent expense were debited for their appropriate amounts.
Required:
1. Prepare general journal entries to record each transaction.
2. Post the transactions into the appropriate T-accounts.
3. Prepare an unadjusted trial balance as of January 30, 2021.
Requirement 1:
Date | Account title and Explanation | Debit | Credit |
Jan.1 | Cash | $115,000 | |
Common stock | $115,000 | ||
[To record issuance of common stock] | |||
Jan.2 | Inventory | $30,000 | |
Accounts payable | $30,000 | ||
[To record purchase of inventory on account] | |||
Jan.4 | Prepaid insurance | $1,800 | |
Cash | $1,800 | ||
[To record cash paid in advance for insurance] | |||
Jan.10 | Accounts receivable | $11,500 | |
Sales revenue | $11,500 | ||
[To record sales on account] | |||
Cost of goods sold | $6,500 | ||
Inventory | $6,500 | ||
[To record cost of goods sold] | |||
Jan.15 | Cash | $25,000 | |
Notes payable | $25,000 | ||
[To record borrowed from bank] | |||
Jan.20 | Salaries and wages expense | $5,500 | |
Cash | $5,500 | ||
[To record payment of salaries and wages] | |||
Jan.22 | Cash | $9,500 | |
Sales revenue | $9,500 | ||
[To record sales on account] | |||
Cost of goods sold | $5,500 | ||
Inventory | $5,500 | ||
[To record cost of goods sold] | |||
Jan.24 | Accounts payable | $14,500 | |
Cash | $14,500 | ||
[To record cash paid for accounts payable] | |||
Jan.26 | Cash | $5,750 | |
Accounts receivable | $5,750 | ||
[To record cash collected from customers] | |||
Jan.28 | Utilities expense | $1,000 | |
Cash | $1,000 | ||
[To record payment of utilities] | |||
Jan.30 | Rent expense | $1,750 | |
Prepaid rent | $1,750 | ||
Cash | $3,500 | ||
[To record payment of rent] |
Requirement 2:
Cash | Accounts receivable | |||||||
Beg. Bal. | $0 | Beg. Bal. | $0 | |||||
Jan.1 | $115,000 | $1,800 | Jan.4 | Jan.10 | $11,500 | $5,750 | Jan.26 | |
Jan.15 | $25,000 | $5,500 | Jan.20 | |||||
Jan.22 | $9,500 | $14,500 | Jan.24 | |||||
Jan.26 | $5,750 | $1,000 | Jan.28 | |||||
$3,500 | Jan.30 | |||||||
End. Bal. | $128,950 | End. Bal. | $5,750 | |||||
Inventory | Prepaid insurance | |||||||
Beg. Bal. | $0 | Beg. Bal. | $0 | |||||
Jan.2 | $30,000 | $6,500 | Jan.10 | Jan.4 | $1,800 | |||
$5,500 | Jan.22 | |||||||
End. Bal. | $18,000 | End. Bal. | $1,800 | |||||
Prepaid rent | Accounts payable | |||||||
Beg. Bal. | $0 | Beg. Bal. | $0 | |||||
Jan.30 | $1,750 | Jan.24 | $14,500 | $30,000 | Jan.2 | |||
End. Bal. | $1,750 | End. Bal. | $15,500 | |||||
Notes payable | Common stock | |||||||
Beg. Bal. | $0 | Beg. Bal. | $0 | |||||
$25,000 | Jan.15 | $115,000 | Jan.1 | |||||
End. Bal. | $25,000 | End. Bal. | $115,000 | |||||
Service revenue | Cost of goods sold | |||||||
Beg. Bal. | $0 | Beg. Bal. | $0 | |||||
$11,500 | Jan.10 | Jan.10 | $6,500 | |||||
$9,500 | Jan.22 | Jan.22 | $5,500 | |||||
End. Bal. | $21,000 | End. Bal. | $12,000 | |||||
Salaries expense | Rent Expense | |||||||
Beg. Bal. | $0 | Beg. Bal. | $0 | |||||
Jan.20 | $5,500 | Jan.30 | $1,750 | |||||
End. Bal. | $5,500 | End. Bal. | $1,750 | |||||
Utilities expense | ||||||||
Beg. Bal. | $0 | |||||||
Jan.28 | $1,000 | |||||||
End. Bal. | $1,000 |
Requirement 3:
HALOGEN LAMINATED PRODUCTS COMPANY | ||
Unadjusted Trail Balance | ||
January 30,2021 | ||
Account title | Debit | Credit |
Cash | $128,950 | |
Accounts receivable | $5,750 | |
Inventory | $18,000 | |
Prepaid insurance | $1,800 | |
Prepaid rent | $1,750 | |
Accounts payable | $15,500 | |
Notes payable | $25,000 | |
Common stock | $115,000 | |
Service revenue | $21,000 | |
Cost of goods sold | $12,000 | |
Salaries expense | $5,500 | |
Rent expense | $1,750 | |
Utilities expense | $1,000 | |
Total | $176,500 | $176,500 |
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