Question

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 50,000 shares of common stock in exchange for $500,000 in cash. 2. Purchased equipment at a cost of $60,000. $20,000 cash was paid and a notes payable to the seller was signed for the balance owed. 3. Purchased inventory on account at a cost of $118,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $220,000. The cost of the goods sold was $90,000. 5. Paid $7,000 in rent on the warehouse building for the month of March. 6. Paid $8,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021. 7. Paid $90,000 on account for the merchandise purchased in 3. 8. Collected $75,000 from customers on account. 9. Recorded depreciation expense of $3,000 for the month on the equipment. Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts is zero. Prepare a trial balance from the ending account balances. Complete this question by entering your answers in the tabs below. T Accounts Trial Balance Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts is zero. (Enter the number of the transaction in the column next to the amount.) Cash Accounts receivable Beg. Bal. Beg. Bal.

Answer 1

CASH					Accounts receivable
Beg. Bal.	$ 0				Beg. Bal.	$ 0
1)	$ 500,000	$ 20,000	2)		4 a)	$ 220,000	$ 75,000	8)
8)	$ 75,000	$ 7,000	5)
		$ 8,000	6)
		$ 90,000	7)		End. Bal.	$ 145,000
End. Bal.	$ 450,000
Inventory					Prepaid insurance
Beg. Bal.	$ 0				Beg. Bal.	$ 0
3)	$ 118,000	$ 90,000	4 b)		6)	$ 8,000
End. Bal.	$ 28,000				End. Bal.	$ 8,000
Equipment					Accumulated depreciation
Beg. Bal.	$ 0				Beg. Bal.		$ 0
2)	$ 60,000						$ 3,000	9)
End. Bal.	$ 60,000				End. Bal.		$ 3,000
Accounts payable					Notes Payable
Beg. Bal.		$ 0			Beg. Bal.		$ 0
7)	$ 90,000	$ 118,000	3)				$ 40,000	2)
End. Bal.		$ 28,000			End. Bal.		$ 40,000
Common Stock					Sales revenue
Beg. Bal.		$ 0			Beg. Bal.		$ 0
		$ 500,000	1)				$ 220,000	4 a)
End. Bal.		$ 500,000			End. Bal.		$ 220,000
Cost of goods sold					Rent expense
Beg. Bal.	$ 0				Beg. Bal.	$ 0
4 b)	$ 90,000				5)	$ 7,000
End. Bal.	$ 90,000				End. Bal.	$ 7,000
Depreciation expense
Beg. Bal.	$ 0
9)	$ 3,000
End. Bal.	$ 3,000

Wainwright Corporation
Trail Balance
Account Title	Debits	Credits
Cash	$ 450,000
Accounts receivable	$ 145,000
Inventory	$ 28,000
Prepaid insurance	$ 8,000
Equipment	$ 60,000
Accumulated depreciation		$ 3,000
Accounts payable		$ 28,000
Notes payable		$ 40,000
Common stock		$ 500,000
Sales revenues		$ 220,000
Cost of goods sold	$ 90,000
Rent expenses	$ 7,000
Depreciation expenses	$ 3,000
Totals	$ 791,000	$ 791,000