Question

3366 Homework The trial balance of My Motor, Inc. on March 1, 20XX, lists the entity's assets, liabilities, and owner's equity on that date. Balance Debit Credit Cash Accounts receivable Accounts payable Common Stock Retained carnings8,000 26,000 4,500 2,000 20,500 Total 30,50030,500 During March, the business engaged in the following transactions: a. Borrowed $45,000 from the bank and signed a note payable in the name of the business. b. Paid cash of $40,000 to acquire land. c. Performed service for a customer and received cash of $5,000. d. Purchased supplies on account, $300. e. Performed customer service and carned revenue on account, $2,600. f. Paid $1,200 on account. g. Paid the following cash expenses: salaries, $3,000; rent, $1,500; and interest, $400. h. Received $3,100 on account. i. Received a $200 utility bill that will be paid next week. j. Paid cash dividends of $1,800. Required: 1.) Prepare journal entries for each transaction. Enter journal entries by the transaction letter. 2.) Prepare the trial balance of My Motors, Inc. at March 31, 20xx. 3.) Prepare financial statements for My Motors, Inc. for the period ending March 31, 20xx. (Income Statement and Balance sheet)

Answer 1

1) Journal Entries:
Date	Accounts Title	Debit $	Credit $
a	Cash	45000
	Note payable		45000
	(being borrowed signing note)
b	Land	40000
	Cash		40000
	(being land purchased of cash)
c	Cash	5000
	Service revenue		5000
	(being cash recd. On service performed)
d	Supplies	300
	Accounts Payable		300
	(being supplies purchased on account)
e	Accounts Receivable	2600
	Service revenue		2600
	(being service performed on account)
f	Accounts Payable	1200
	Cash		1200
	(being Accounts payable paid)
g	Salary exp	3000
	Rent exp	1500
	Interest exp	400
	Cash		4900
	(being cash expenses made)
h	Cash	3100
	Accounts Receivable		3100
	(being cash received from AR)
i	Utilities exp	200
	Accounts Payable		200
	(being utilities bill booked)
j	Dividend	1800
	Cash		1800
	(being dividend paid)

T-Accounts:
DEBIT	AMOUNT$	CREDIT	AMOUNT$
Cash a/c
OB	26000	b	40000
a	45000	f	1200
c	5000	g	4900
h	3100	j	1800
		CB	31200
AR a/c
OB	4500	h	3100
e	2600	CB	4000
AP a/c
f	1200	OB	2000
CB	1300	d	300
		i	200
CS a/c
		OB	20500
RE a/c
		OB	8000
NP a/c
		a	45000
Land a/c
b	40000
Service Rev a/c
CB	7600	c	5000
		e	2600
Supplies a/c
d	300
Salary exp a/c
g	3000
Rent exp a/c
g	1500
Interest exp a/c
g	400
Utilities exp a/c
i	200
Dividend a/c
j	1800

2)
TRIAL BALANCE :
Accounts Title	Debit $	Credit $
Cash	31200
AR	4000
AP		1300
CS		20500
RE		8000
NP		45000
Land	40000
Service Rev		7600
Supplies	300
Salaries exp	3000
rent	1500
interest exp	400
Utilities exp	200
Dividend paid	1800
Total	82400	82400
3)
Income Statement:
Ser. Rev.	7600
Less: Exp.
Salary	3000
Rent	1500
interest	400
Utilities	200
Total exp	5100
Net Income	2500
less:Dividend	-1800
Tfr. To RE	700
Balance Sheet:
Assets:	Amount $
Cash	31200
AR	4000
Supplies	300
Current Assets	35500
Land	40000
Total Assets	75500
Liabilities & Capital:
AP	1300
Current Liabilities	1300
NP	45000
CS	20500
RE(8000+700)	8700
Total Liab. & Capi.	75500