Question

Following are the transactions of Dennen Inc. for the month of January 2018. The effect of these transactions is not included in the begininng balances shown. a. Borrowed $30,000 from a local bank. b. Lent $10,000 to an affiliate; accepted a note due in one year. c. Sold 100 additional shares to investors for $500 cash. d. Purchased $15,000 of equipment, paying $5,000 cash and signing a note for the rest due in one year. e. Declared and paid $2,000 in dividends to shareholders. Cash Accounts Receivable Equipment 1,000 Beg. bal. 900 Beg. bal. Beg. bal. 15,100 Contributed Capital Notes Payable Retained Earnings Beg. bal. 10,000 Beg. bal. 3,000 Beg. bal. 4,000 Prepare a trial balance for Dennen Inc. as of January 31, 2018. DENNEN INC. Trial Balance January 31, 2018 Debit Credit Cash Accounts receivable 1,000 Equipment Notes payable 30,100 43,000 Contributed capital 4,500 Retained earnings 8,000 31,100 55,500 Total

Answer 1

Solution

Dennen Inc

Trial Balance as of January 31, 2018:

Dennen Inc
Trial Balance
As of January 31, 2018
Account Titles	Debit	Credit
Cash	$14,400
Accounts Receivable	$1,000
Notes Receivable	$10,000
Equipment	$30,100
Notes Payable		$43,000
Contributed Capital		$4,500
Retained Earnings		$8,000
Total	$55,500	$55,500

Computations:

Cash Account

		Cash Account
Beg. Balance		$900		Notes Receivable		$10,000
Notes Payable		$30,000		Equipment		$5,000
Contributed Capital		$500		Dividends		$2,000
Total		$31,400				$31,400
Ending balance		$14,400
		Notes Payable
				Beg. Balance		$3,000
Cash		$30,000
Equipment		$10,000
		$43,000				$43,000
				Ending balance		$43,000
		Equipment
Beg. Balane		$15,100
Cash		$5,000
Notes		$10,000
Total		$30,100		Total		$30,100
Ending balance		$30,100
	Contributed Capital
			Beg. Balance		$4,000
			Cash		$500
total	$4,500		Total		$4,500
			Ending balance		$4,500
	Retained Earnings
Dividends	$2,000		Beg. Balance		$10,000
total	$10,000		Total		$10,000
			Ending balance		$8,000