Question

Question 1 20 pts . Halogen Laminated Products Company began business on January 1, 2019. During January, the following transactions occurred: Jan. 1 Issued common stock in exchange for $116,000 cash. 2 Purchased inventory on account for $29,000 (the perpetual inventory system is used). 4. Paid an insurance company $1,680 for a one-year insurance policy. 10 Sold merchandise on account for $11,400. The cost of the merchandise was $6,400. 15 Borrowed $24,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months. Paid employees $5,400 salaries and wages for the first half of 20 the month Sold merchandise for $9.400 cash. The cost of the 22 merchandise was $5,400.

Answer 1

1.

Credit Journal Date Account Title and Explanations Debit Jan. 1 Cash $116,000 Common Stock $116,000 $29,000 Jan. 2 Merchandise Inventory Accounts Payable $29,000 Jan. 4 Insurance expense Prepaid Insurance Cash $140 $1,540 $1,680 $11,400 Jan. 10 Accounts Receivable Sales Revenue $11,400 $6,400 Cost of Goods Sold Merchandise Inventory $6,400 $24,000 Jan. 15 Cash Notes Payable $24,000 Jan. 20 Salaries and wages expense Cash $5,400 $5,400 $9,400 Jan. 22 Cash Sales Revenue $9,400 $5,400 Cost of Goods Sold Merchandise Inventory $5,400 $14,400 Jan. 24 Accounts Payable Cash $14,400 $5,700 Jan. 26 Cash Accounts Receivable $5,700 Jan. 28 Utility expense Cash $1,100 $1,100 Jan. 30 Rent expense Prepaid Rent Cash $1,700 $1,700 $3,400

2.

Trial Balance January 30, 2019 Cash $129,120 Common Stock $116,000 Merchandise Inventory $17,200 Accounts Payable $14,600 Insurance expense $140 Prepaid Insurance $1,540 Accounts Receivable $5,700 Sales Revenue $20,800 Cost of Goods Sold $11,800 Notes Payable $24,000 Salaries and wages expense $5,400 Utility expense $1,100 Rent expense $1,700 Prepaid Rent $1,700 Total $175,400 $175,400

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