Question

The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2020.

Account Title	Debits			Credits
Cash		5,800
Accounts receivable		2,800
Inventory		5,800
Equipment		11,800
Accumulated depreciation					4,300
Accounts payable					3,800
Accrued liabilities					0
Common stock					10,000
Retained earnings					8,100
Sales revenue					0
Cost of goods sold		0
Salaries expense		0
Rent expense		0
Advertising expense		0
Totals		26,200			26,200

The following transactions occurred during January 2021:

Jan.		1		Sold merchandise for cash, $4,300. The cost of the merchandise was $2,800. The company uses the perpetual inventory system.
		2		Purchased equipment on account for $6,300 from the Strong Company.
		4		Received a $100 invoice from the local newspaper requesting payment for an advertisement that Whitlow placed in the paper on January 2.
		8		Sold merchandise on account for $5,800. The cost of the merchandise was $3,600.
		10		Purchased merchandise on account for $9,900.
		13		Purchased equipment for cash, $700.
		16		Paid the entire amount due to the Strong Company.
		18		Received $5,600 from customers on account.
		20		Paid $700 to the owner of the building for January’s rent.
		30		Paid employees $3,800 for salaries for the month of January.
		31		Paid a cash dividend of $1,000 to shareholders.

Answer 1

Date	Account titles and explanation	Debit	Credit
01-Jan	Cash	$4,300
	Sales revenue		$4,300
	(cash sales made)
01-Jan	Cost of goods sold	$2,800
	Inventory		$2,800
	(Cost of sales recorded)
02-Jan	Equipment	$6,300
	Accounts payable		$6,300
	(equipment purchased on account)
02-Jan	Advertising expense	$100
	Accounts payable		$100
04-Jan	No entry
08-Jan	Accounts receivable	$5,800
	Sales revenue		$5,800
	(sales recorded)
08-Jan	Cost of goods sold	$3,600
	Inventory		$3,600
	(cost of sales recorded)
16-Jan	Account payable	$6,300
	Cash		$6,300
	(paid to strong)
18-Jan	Cash	$5,600
	Account receivable		$5,600
	(received from customer)
20-Jan	Rent expense	$700
	cash		$700
	(rent paid)
30-Jan	Salary expense	$3,800
	Cash		$3,800
	(salary paid)
31-Jan	Dividend paid	$1,000
	Cash		$1,000
	(dividend paid)