Question

The followlng transactions occurred during March 2018 for the Walnwright Corporation. The company owns and operates a wholesale warehouse. 1 Issued 50,000 shares of common stock In exchange for $500,000 In cash 2 Purchased equipment at a cost of $60,000. $20,000 cash was pald and a note payable was slgned for the balance owed. 3. Purchased Inventory on account at a cost of $118,000. The company uses the perpetual Inventory system. 5. Pald $7000 In rent on the warehouse building for the month of March. 6. Pald $8,000 to an Insurance company for fire and lablity Insurance for a one-year perlod beginning Aprl 1, 2018. 7. Pald $90,000 on account for the merchandise purchased In 3. 8. Collected $75,000 from customers on account 9. Recorded depreclation expense of $3,000 for the month on the equipment. Post the above transactions to the below T-accounts. Assume that the opening balances In each of the accounts is zero. Prepare a trial balance from the ending account balances.

Answer 1

Cash
Date	Transaction	Debit $	Transaction	Credit $
1)	Common Stock	500,000	Equipment	20,000
5)			Rent Expenses	7,000
6)			Prepaid Insurance	8,000
7)			Accounts Payable	90,000
8)	Accounts receivable	75,000
			Ending Balance	450,000
	TOTAL	575,000	TOTAL	575,000
Accounts receivable
Date	Transaction	Debit $	Transaction	Credit $
4)	Sales Revenue	220000
8)			Cash	75,000
			Balance	145,000
	TOTAL	220000	TOTAL	220,000
Inventory
Date	Transaction	Debit $	Transaction	Credit $
3)	Accounts Payable	118000
4)			Cost of goods sold	90,000
			Balance	28,000
		118000	TOTAL	118,000
Prepaid Insurance
Date	Transaction	Debit $	Transaction	Credit $
6)	Cash	8000
			Balnace	8,000
	TOTAL	8,000	TOTAL	8,000
Equipment
Date	Transaction	Debit $	Transaction	Credit $
2)	Cash	20,000		-
2)	Note payable	40,000	Balance	60,000
	TOTAL	60,000	TOTAL	60,000
Accumulated Depreciation
Date	Transaction	Debit $	Transaction	Credit $
9)			Depreciation Expenses	3000
	Balance	3,000
	TOTAL	3,000	TOTAL	3,000
Accounts Payable
Date	Transaction	Debit $	Transaction	Credit $
3)			Inventory	118000
7)	Cash	90000
	Ending Balance	28,000
	TOTAL	118,000	TOTAL	118,000
Notes Payable
Date	Transaction	Debit $	Transaction	Credit $
2)			Equipment	40,000
	Ending balance	40,000
	TOTAL	40,000	TOTAL	40,000
Commn Stock
Date	Transaction	Debit $	Transaction	Credit $
1)			Cash	500000
	Ending Balance	500,000
	TOTAL	500,000	TOTAL	500,000
Sales Revenue
Date	Transaction	Debit $	Transaction	Credit $
4)			Accounts receivable	220,000
	Balance	220,000
	TOTAL	220,000	TOTAL	220,000
Cost of goods sold
Date	Transaction	Debit $	Transaction	Credit $
4)	Inventory	90,000
			Balance	90,000
	TOTAL	90,000	TOTAL	90,000
Rent Expenses
Date	Transaction	Debit $	Transaction	Credit $
5)	Cash	7,000
			Balance	7,000
	TOTAL	7,000	TOTAL	7,000
Depreciation expenses
Date	Transaction	Debit $	Transaction	Credit $
9)	Accumulated Depreciation	3000
			Balance	3000
	TOTAL	3000	TOTAL	3000

Trial Balance
	Debit $	Credit $
Cash	450,000
Accounts Receivable	145,000
Inventory	28,000
Prepaid Insurance	8,000
Equipment	60,000
Accumulated depreciation		3,000
Accounts Payable		28,000
Notes Payable		40000
Common Stock		500000
Sales Revenue		220000
Cost of goods sold	90000
Rent Expenses	7000
Depreciation Expenses	3000
TOTAL	791,000	791,000