Question

Required information Problem 2-2 Accounting cycle through unadjusted trial balance LO2-2, 2-3] [The following information applies to the questions displayed below.] The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2017 Account Title Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Accounts payable Common stock Retained earnings Sales revenue Cost of goods sold salaries and wages expense Rent expense Advertising expense Debits Credits 5,000 2,000 5,000 11,000 3,500 3,000 10,000 6,500 Totals 23,000 23,000 The following transactions occurred during January 2018: Jan. 1 Sold merchandise for cash, $3,500. The cost of the merchandise was $2,000. The company uses the perpetual inventory sys 2 Purchased equipment on account for $5,500 from the Strong Company. 4 Received a $150 invoice from the local newspaper requesting payment for an advertisement that Whitlow tem. placed in the paper on January 2. 8 Sold merchandise on account for $5,000. The cost of the merchandise was $2,800 10 Purchased merchandise on account for $9,500. 13 Purchased equipment for cash, $800 16 Paid the entire amount due to the Strong Company. 18 Received $4,000 from customers on account.

Answer 1

Answer

• The first step is to calculate unadjusted balance of all the accounts after all transactions:

---Unadjusted Balances of Assets:

Transaction/Date	Cash	Accounts receivables	Inventory	Equipment	Accumulated Depreciation - Equipment
Beginning Balance	$               5,000.00	$                     2,000.00	$            5,000.00	$         11,000.00	$             3,500.00
Jan-01	$               3,500.00		$        (2,000.00)
Jan-02				$           5,500.00
Jan-04
Jan-08		$                     5,000.00	$         (2,800.00)
Jan-10			$            9,500.00
Jan-13	$                (800.00)			$               800.00
Jan-16	$            (5,500.00)
Jan-18	$               4,000.00	$                  (4,000.00)
Jan-20	$                (800.00)
Jan-30	$            (3,000.00)
Jan-31	$            (1,000.00)
Ending Unadjusted balance	$               1,400.00	$                     3,000.00	$            9,700.00	$         17,300.00	$             3,500.00

---Unadjusted Balance of Liabilities & Equities

Transaction/Date	Accounts Payable	Common Stock	Retained Earnings
Beginning Balance	$               3,000.00	$                  10,000.00	$            6,500.00
Jan-01
Jan-02	$               5,500.00
Jan-04	$                  150.00
Jan-08
Jan-10	$               9,500.00
Jan-13
Jan-16	$            (5,500.00)
Jan-18
Jan-20
Jan-30
Jan-31
Ending Unadjusted balance	$            12,650.00	$                  10,000.00	$            6,500.00

---Unadjusted Balance of Revenues & Expenses

Transaction/Date	Sales Revenue	Cost of Goods Sold	Salaries & Wages Expenses	Rent Expenses	Advertising Expenses	Dividends
Jan-01	$               3,500.00	$                     2,000.00
Jan-02
Jan-04					$                 150.00
Jan-08	$               5,000.00	$                     2,800.00
Jan-10
Jan-13
Jan-16
Jan-18
Jan-20				$               800.00
Jan-30			$            3,000.00
Jan-31						$          1,000.00
Ending Unadjusted balance	$               8,500.00	$                     4,800.00	$            3,000.00	$               800.00	$                 150.00	$          1,000.00

• Final Answer, based on Balances above:

Trial Balance – January 31, 2018

Accounts title	Unadjusted Trial Balance
	Debit	Credit
Cash	$      1,400.00
Accounts receivables	$      3,000.00
Inventory	$      9,700.00
Equipment	$    17,300.00
Accumulated Depreciation - Equipment		$                3,500.00
Accounts Payable		$              12,650.00
Common Stock		$              10,000.00
Retained Earnings [See note below]		$                6,500.00
Dividends [See note below]	$      1,000.00
Sales Revenue		$                8,500.00
Cost of Goods Sold	$      4,800.00
Salaries & Wages Expenses	$      3,000.00
Rent Expenses	$          800.00
Advertising Expenses	$          150.00
TOTAL	$    41,150.00	$              41,150.00

---Note : Alternatively, Dividends shown above can be adjusted in Retained Earnings which will make Retained earnings balance $ 5,500, and then Dividends need not to be shown [This is mentioned because your data is not showing ‘Dividend’ account in Trial balance.