Question

Required information Problem 2-8A Complete the steps in the measurement of external transactions (LO2-4,2-5, 2-6) (The following information applies to the questions displayed below.) Pirates Incorporated had the following balances at the beginning of September. PIRATES INCORPORATED Trial Balance September 1 Accounts Debits Credits Cash $ 5,700 Accounts Receivable 1,700 Supplies 6,800 Land 10,400 Accounts Payable $ 6,700 Notes Payable 2,200 Common Stock 8,200 Retained Earnings 7,500 Totals $24,600 $24,600 The following transactions occur in September. September 1 Provide services to customers for cash, $3,900. September 2 Purchase land with a long-term note for $5,600 from Crimson Company September 4 Receive an invoice for $420 from the local newspaper for an advertisement that appeared on September 2. September 8 Provide services to customers on account for $5,200. September 10 Purchase supplies on account for $1,200. September 13 Pay $3,200 to Crimson Company for a long-term note. September 18 Receive $4,200 from customers on account. September 20 Pay $820 for September's rent. September 30 Pay September's utility bill of $1,600. September 30 Pay employees $3,200 for salaries for the month of September. September 30 Pay a cash dividend of $1,200 to shareholders. Problem 2-8A Part 4 4. Prepare a trial balance as of September 30. PIRATES INCORPORATED Trial Balance September 30 Accounts Debit Credit Cash Accounts Receivable Supplies Land Accounts Payable Notes Payable Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Rent Expense Advertising Expense Utilities Expense Totals $ 0 $

Answer 1

Trial balance shows the end effect of transactions on each accounts of the business. Trial balance will show the end value of accounts on a specified date. It shows the end values of assets, liabilities, revenues and expenses. Before preparation of trial balance, it is necessary to record the journal entries for transactions and post them to T-accounts.

Trial Balance:

PIRATES INCORPORATED Trial Balance September 30 Debit Credit Cash $3.780 Account Recievable $2,700 Supplies $8,000 Land $16,000 Accounts Payable $8,320 Notes Payable $4,600 Common stock $8,200 Retained Earnings $7,500 Dividends $1,200 Service Revenue $9,100 Salaries expense $3,200 Rent expense $820 Advertising expense $420 Utilities Expenses $1,600 Total $37,720 $37,720

Working notes:

Journal entries:

PIRATES INCORPORATED Journal entries Date Account Debit Credit 1-Sep Cash $3,900 Service Revenue $3,900 $5,600 2-Sep Land Notes Payable $5,600 $420 4-Sep Advertising expense Accounts Payable $420 8-Sep Accounts Receivable Service Revenue $5,200 $5,200 $1,200 10-Sep Supplies Accounts Payable $1,200 $3,200 13-Sep Notes Payable Cash $3,200 18-Sep Cash Accounts Receivable $4,200 $4,200 $820 20-Sep Rent expense Cash $820 30-Sep Utilities expense Cash $1,600 $1,600 $3,200 30-Sep Salaries expense Cash $3,200 $1,200 30-Sep Dividends Cash $1,200

T-accounts:

Op.Bal 1-Sep 18-Sep $4,200 Cash $5,700 13-Sep $3,900 20-Sep $4,200 30-Sep 30-Sep 30-Sep $3,780 $3,200 $820 $1,600 $3,200 $1,200 Accounts Receivable Op.Bal $1,700 18-Sep 8-Sep $5,200 Bal. $2,700 Bal. Op.Bal 10-Sep Bal. Supplies $6,800 $1,200 $8,000 Op.Bal 2-Sep Bal. Land $10,400 $5,600 $16,000 13-Sep Accounts Payable Op.Bal 4-Sep 10-Sep Bal. $6,700 $420 $1,200 $8,320 Notes Payable $3,200 Op.Bal 2-Sep Bal. $2,200 $5,600 $4,600 Common Stock Op.Bal Bal. $8,200 $8,200 Retained Earnings Op.Bal Bal. $7,500 $7,500 Op.Bal 30-Sep Bal. Dividends $0 $1,200 $1,200 Service Revenue Op.Bal 1-Sep 8-Sep Bal. $0 $3,900 $5,200 $9,100 Salaries Expense $0 $3,200 $3,200 Op.Bal 30-Sep| Bal. Op.Bal Rent Expense $0 $820 $820 20-Sep| Bal. Advertising Expense Op.Bal $0 4-Sep $420 Bal. $420 Op.Bal 30-Sep Bal. Utilities Expense $0 $1,600 $1,600