Question

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3,5 e of $106,000. The P2-67B. (Learning Objectives 3, 5: Analyze the impact of business transactions on accounts and construct a trial balance) During the first month of operations (May 2012 Shreve Music Corporation completed the following selected transactions: a. The business received cash of $46,000 and a building with a fair value of $106.00 corporation issued common stock to the stockholders. b. Borrowed $60,000 from the bank; signed a note payable. c. Paid $47,000 for music equipment. d. Purchased supplies on account, $530. e. Paid employees' salaries, $5,700. f. Received $3,710 for music services performed for customers. g. Performed services for customers on account, $12.900. h. Paid $300 of the account payable created in transaction d. i. Received a $700 bill for utilities expense that will be paid in the near future. j. Received cash on account, $1,200. k. Paid the following cash expenses: (1) rent, $1,100; (2) advertising, $800. Requirements 1. Record each transaction directly in the T-accounts without using a journal. Use the letters to identify the transactions. Determine the ending balance in each account. 2. Prepare the trial balance of Shreve Music Corporation at May 31, 2018.

Answer 1

Part 1

Cash
Date	Details	Debit	Date	Details	Credit
	Common stock	46000		Music Equipment	47000
	Notes payable	60000		Salaries Expenses	5700
	Service revenue	3710		Accounts payable	300
	Accounts receivable	1200		Rent Expenses	1100
				Advertising Expenses	800
	Total	110910		Total	54900
May-31	Balance	56010
Building
Date	Details	Debit	Date	Details	Credit
	Common stock	106000
	Total	106000		Total
May-31	Balance	106000
Common stock
Date	Details	Debit	Date	Details	Credit
				Building	106000
				Cash	46000
	Total			Total	152000
				Balance	152000
Notes paayble
Date	Details	Debit	Date	Details	Credit
				Cash	60000
	Total			Total	60000
			May-31	Balance	60000
Music Equipment
Date	Details	Debit	Date	Details	Credit
	Cash	47000
	Total	47000		Total
May-31	Balance	47000
Supplies
Date	Details	Debit	Date	Details	Credit
	Accounts payable	530
	Total	530		Total
May-31	Balance	530
Salary Expenses
Date	Details	Debit	Date	Details	Credit
	Cash	5700
	Total	5700		Total
May-31	Balance	5700
Service Revenue
Date	Details	Debit	Date	Details	Credit
				Cash	3710
				Accounts receivable	12900
	Total			Total	16610
			May-31	Balance	16610
Accounts receivable
Date	Details	Debit	Date	Details	Credit
	Service Revenue	12900		Cash	1200
	Total	12900		Total	1200
May-31	Balance	11700
Accounts payable
Date	Details	Debit	Date	Details	Credit
	Cash	300		Supplies	530
				Utilities Expenses	700
	Total	300		Total	1230
			May-31	Balance	930
Utilities Expenses
Date	Details	Debit	Date	Details	Credit
	Accounts payable	700
	Total	700		Total
May-31	Balance	700
Rent Expenses
Date	Details	Debit	Date	Details	Credit
	Cash	1100
	Total	1100		Total
May-31	Balance	1100
Advertising Expenses
Date	Details	Debit	Date	Details	Credit
	Cash	800
	Total	800		Total
May-31	Balance	800

Part 2

Shreve Music Corporation
For the first month ended May 31, 2018
Account Titels	Debit ($)	Credit ($)
Cash	56010
Accounts Receivables	11700
Supplies	530
Building	106000
Music equipments	47000
Accounts payable		930
Notes payable		60000
Common stock		152000
Service revenue		16610
Salary Expenses	5700
Rent Expenses	1100
Utility Expenses	700
Advertising Expenses	800
Total	229540	229540

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