Question

Rocky Mountain tours CO is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2 its first month of operations are indicated in the following T accounts

Trial Balance Rocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 2012, its first month of operations, are indicated in the following T accounts: Cash Equipment Dividends (1) 38,400 (2) 2,700 (3) 27,600 (9) 3,800 (7) 15,350 (3) 4,950 (4) 4,200 (6) 11,500 (9) 3,800 Accounts Receivable Accounts Payable Service Revenue (5) 20,750|(7) 15,350 (6) 11,5003) 22,650 (5) 20.750 Supplies Common Stock Operating Expenses (2) 2.700(B) 1,550 (1) 38,400 (4) 4,200 (8) 1,550 a. Prepare an unadjusted trial balance. List all the accounts in the order of Assets, Liabilities, Stockholders' equity, Revenues, and Expenses. Place the amounts in the proper columns. If an entry is not required in an amount box, leave it blank. Rocky Mountain Tours Co. Unadjusted Trial Balance June 30, 2012 Debit Balances Credit Balances Previous Check My Work

Answer 1

a. Listing all accounts in order of Assets, Liabilities, SH equity, Revenue and expenses

	Account	debited	Account	Credited
Transaction	Type	Effect	Type	Effect	Details
1	Asset	+	Owners equity	+	Introduction of Capital, Increase in Cash and capital
2	Asset	+	Asset	-	Purchase of Supplies
3	Asset	+	Asset	-	Purchase of equipment partly in Cash and partly Credit
			Liability	+
4	Expense	+	Asset	-	Payment of operating expenses
5	Asset	+	Revenue	+	Sales made on account
6	Liability	-	Asset	-	Payment of accounts payable
7	Asset	+	Asset	-	Receipt of cash from sales on account
8	Expense	+	Asset	-	supplies expense
9	Drawings	+	Asset	-	payment of dividends

Unadjusted Trail Balance June 30,20Y2

	Debit	Credit
Cash	26,600
Accounts receivable	5400
Supplies	1150
Equipment	27600
Accounts payable		11,150
Common stock		38,400
Dividends	3800
Service Revenue		20750
Operating Expenses	5750
Total	70,300	70300

b. Net income = Service revenue - operating expenses =$20,750-$5750 =$15,000