Question

Exercise 3-18B.

shift Z 195 sh Flow The Double-Entry Accounting System Exercise 3-18B Recording events in T-accounts and preparing a trial balance LO 3-1, 3-3 The following events apply to Perry Carpet Cleaners in Year 1, its first year of operations: 1. Received $45,000 cash from the issue of common stock. 2. Earned $37,500 of service revenue on account. 3. Incurred $15,000 of operating expenses on account. 4. Received $30,000 cash for performing services. 5. Paid $12,000 cash to purchase land. 6. Collected $33,000 of cash from accounts receivable. 7. Received a $9,000 cash advance for services to be provided in the future. 8. Purchased $1,350 of supplies on account. 9. Made an $11.250 payment on accounts payable. 10. Paid a $7,500 cash dividend to the stockholders. 11. Recognized $750 of supplies expense. 12. Recognized $7,500 of revenue for services provided to the customer in Event 7. assuming operating ce sheet? icial pany paid case agree- 3 received Required a. Record the events in the general journal. b. Post the events to T-accounts and determine the ending account balances. c. Test the equality of the debit and credit balances of the T-accounts by preparing a trial balance. LO 3-3 Exercise 3-19B Preparing a trial balance Required On December 31, Year 2, Wages Company had the following normal account balances in its general ledger. Use this information to prepare a trial balance. ash Flow Common Stock $ 50,000 32,000 600

Answer 1

Answer a) General Journal Credit Sno. 1 Debit S 45,000 Particulars Cash Common Stock (being cash received on issue of Common Stock) S 45,000 2 S 37,500 Accounts Receivable Service Revenue (Being Services rendered on account) S 37,500 3 S 15,000 Operating Expenses Accounts Payable (being Operating expenses incurred on account) $ 15,000 4 S 30,000 Cash Service Revenue (Being Services rendered for cash) $ 30,000 5 S 12,000 Land Cash (being Land purchased for cash) S 12,000 6 S 33,000 Cash Accounts Receivable (Being Cash collected for accounts receivable) $ 33,000

S 7 9,000 Cash Unearned Service Revenue (being advance received against Service revenue) S 9,000 8 S 1,350 Supplies (Asset) Accounts Payable (being Supplies purchased on account) S 1,350 9 S 11,250 Accounts Payable Cash (being cash paid for accounts payable) S 11,250 10 S 7,500 Dividend Cash (being cash dividend paid) S 7,500 11 S 750 Supplies Expense Supplies (Asset) (being supplies Expense recognized S 750 12 S 7,500 Unearned Service Revenue Service Revenue (being Service revenue recognized) S 7,500

Answer b) T Accounts Debit Particulars Balance b/d Common Stock Service Revenue Accounts Receivable Unearned Service Revenue Cash Credit Amount (In $) Particulars Amount (In $) Land 12,000 45,000 Accounts Payable 11,250 30,000 Dividend 7,500 33,000 9,000 Balance c/d 117,000 Total 86,250 117,000 Total Common Stock Debit Amount (In $) Credit Amount (In $) Particulars Particulars Balance b/d Cash 45,000 Balance c/d Total 45,000 45,000 Total 45,000

Debit Amount (In $) Particulars Service Revenue Credit Particulars Accounts receivable Cash Unearned Service Revenue Amount (In $) 37,500 30,000 7,500 Balance b/d Total 75,000 75,000 Total 75,000 Particulars Balance b/d Service Revenue Accounts Receivable Debit Amount (In $) Particulars Cash 37,500 Credit Amount (In $) 33,000 Balance c/d Total 4,500 37,500 Total 37,500 Operating Expenses Debit Amount (In $) Particulars 15,000 Credit Amount (In $) Particulars Accounts Payable Balance c/d Total 15,000 15,000 Total 15,000

Particulars Cash Debit Amount (In $) 11,250 Accounts Payable Credit Particulars Amount (In $) Balance b/d Operating Expenses 15,000 Supplies Asset 1,350 Balance c/d Total 5,100 16,350 Total 16,350 Unearned Service Revenue Debit Amount (In $) Particulars 7,500 Cash Particulars Service Revenue Credit Amount (In $) 9,000 Balance c/d Total 1,500 9,000 Total 9,000 Land Debit Amount (In S) Credit Amount (In $) Particulars Particulars Balance b/d Cash 12,000 Balance c/d Total 12,000 12,000 Total 12,000

Supplies (Asset) Debit Credit Particulars Amount (In $) Particulars Amount (In $) Balance b/d Supplies Expense 750 Accounts Payable 1,350 Balance c/d Total 600 1,350 Total 1,350 Dividend Debit Amount (In $) 7,500 Credit Amount (In $) Particulars Cash Particulars Balance c/d Total 7,500 7,500 Total 7,500 Supplies Expense Debit Amount (In S) Particulars 750 Credit Amount (In S) Particulars Supplies (Asset) Balance c/d Total 750 750 Total 750

Answer c) Trial Balance Trail Balance of Perry Carpet Cleaners Debit $ 86,250 Credit S 45,000 $ 75,000 S 4,500 S 5,100 Accounts Cash Common Stock Service Revenue Accounts Receivable Accounts Payable Operating Expenses Unearned Service Revenue Land Supplies - Asset Dividend Supplies - Expenses Total $ 15,000 S 1,500 $ 12,000 S 600 S 7,500 S 750 $ 126,600 S 126,600