Question

I dont understand how to calculate the after trial balance in this question.

Im not able to get the correct debit and credit.

Cordell Inc. experienced the following events in 2018, its first year of operation:

1. Received $40,000 cash from the issue of common stock.

2. Performed services on account for $82,000.

3. Paid a $6,000 cash dividend to the stockholders.

4. Collected $76,000 of the accounts receivable.

5. Paid $53,000 cash for other operating expenses.

6. Performed services for $19,000 cash.

7. Recognized $3,500 of accrued utilities expense at the end of the year.

Answer 1

Hi,

Below is the Trial Balance for the transactions

Ledger Name	Debit	Credit
Cash	$76,000
Stocks		$40,000
Revenue		$101,000
Debtors	$6,000
Dividend	$6,000
Operating Expenses	$53,000
Utility Expenses	$3,500
Utility Exp Payable		$3,500
Total	$144,500	$144,500

The following is the treatment for each of the transactions in the question:

1. $40,000 cash received (Debit) and stocks issued (Credit)

2. Performed Services $82,000. Debit Debtors and Credit Revenue.

3. Paid $6,000 Dividend (Debit) and Credit Cash.

4. Collected $76,000. Debit Cash and Credit Debtors.

5. Paid $53,000 for Operating Expenses (Debit) and Credit Cash.

6. Performed Services for Cash (Debit) $19,000 Credit Revenue.

7. $3,500 Accrued Utilities Expenses (Debit) credit Utility Expenses Payable.

The sum total of the ledgers after passing the entries with the above treatment would result in the trial balance.