Question

Show Me How Calculator Print Item 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 Dividends Equipment (3) 15,000 (9) 1,500 (1) 40,000 (2) 4,000 (7) 13,100(3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500 Accounts Receivable Accounts Payable Service Revenue (5) 20,500 (7) 13,100 (6) 6,000|(3) 10,000 (5) 20,500 Common Stock Supplies (2) 4,000 (8) 2,200 (1) 40,000 Operating Expenses (4) 6,175 (8) 2,200 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, 20Y2 Debit Balances Credit Balances

Answer 1

Account Type	Normal balance	To be increased	To be decreased
Assets	Debit	Debit	Credit
Liabilities	Credit	Credit	Debit
Equity	Credit	Credit	Debit
Revenue	Credit	Credit	Debit
Expenses	Debit	Debit	Credit

Trial Balance:

1. · A Trial Balance is a list of accounts and their balances at a given time.
2. · It prepares at the end of an accounting period.
3. · Debit balances appear in the left column and Credit balances appear in the right column.
4. · It ensures an arithmetical accuracy of debit and credit side.
5. · It’s a necessary checkpoint for uncovering certain types of errors in journalizing and posting.

a. Rocky Mountain Tours Co. Unadjusted Trial Balance June 30,2012 Account Info Debit Credit Cash $ 30,425 Accounts Receivable $ 7,400 Supplies $ 1,800 Equipment $ 15,000 Accounts Payable $ 4,000 Common Stock $ 40,000 Dividends $ 1,500 Service Revenue $ 20,500 Operating Expenses $ 8,375 TOTAL $ 64,500 $ 64,500 $ Workings *Cash= $40,000+13,100-4,000-5,000-6,175-6,000-1,500=$30,425. *Accounts Receivable = $20,500-13,100=$7,400. *Supplies=$4,000-2,200 *Equipment=$15,000 *Accounts Payable=$10,000-6,000 *Common Stock=$40,000. * Dividends=$1,500. *Service Revenue=$20,500. * Operating Expenses=$6,175+2,200=$8,375. Fav.Balance Debit Debit Debit Debit Credit Credit Debit Credit Debit b. Net Income = $12,125 [Service Revenue - Operating Expenses] [$20,500-8,375]

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