Professional Documents
Culture Documents
.:.
During May, the company completed the following transactions.
May 3 Paid one-half of 4/30/12 accounts payable.
4 Purchased inventory on account, $5,000.
6 Collected all of 4/30/12 accounts receivable.
7 Sold inventory costing $3,850 for $3,000 cash and $2,000 on account.
8 Sold one-half of the land for $6,500, receiving $4,000 cash plus a note for $2,500.
15 Paid installment of $2,500 on notes payable (entire amount reduces the liability account).
21 Issued additional capital stock for $1,000 cash.
23 Sold inventory costing $2,000 for $3,750 cash.
25 Paid salaries of $1,000.
26 Paid rent of $250.
29 Purchased desk for $250 cash.
Required:
1. Prepare the journal entry for each transaction.
2. Set up T-accounts with the proper account balances at April 30, 2012, and post the entries to
the T-accounts.
3. Prepare a trial balance as of May 31, 2012.
SOLUTION:
1.
2012
May
3 Accounts Payable.................................................
3,000
Cash................................................................
4 Inventory..............................................................
3,000
5,000
Accounts Payable...........................................
P 346 (LO3, LO4)
May
5,000
(Continued)
6 Cash......................................................................
2,450
Accounts Receivable......................................
2,450
7 Cash......................................................................
3,000
Accounts Receivable............................................
2,000
Sales Revenue................................................
Cost of Goods Sold..............................................
5,000
3,850
Inventory........................................................
3,850
8 Cash......................................................................
4,000
Notes Receivable.................................................
2,500
Land...............................................................
15 Notes Payable.......................................................
6,500
2,500
Cash................................................................
21 Cash......................................................................
2,500
1,000
Capital Stock..................................................
23 Cash......................................................................
Sales Revenue................................................
1,000
3,750
3,750
2,000
Inventory........................................................
25 Salaries Expense..................................................
2,000
1,000
Cash................................................................
26 Rent Expense.......................................................
1,000
250
Cash................................................................
29 Furniture...............................................................
250
250
Cash................................................................
250
2.
Beg. bal.
5/6
5/7
5/8
5/21
5/23
End. bal.
CASH
5,050 5/3
2,450 5/15
3,000 5/25
4,000 5/26
1,000 5/29
3,750
12,250
3,000
2,500
1,000
250
250
ACCOUNTS RECEIVABLE
Beg. bal.
2,450 5/6
2,450
5/7
2,000
End. bal.
2,000
Beg. bal.
End. bal.
LAND
13,000 5/8
6,500
Beg. bal.
5/29
End. bal.
FURNITURE
2,000
250
2,250
6,500
5/8
NOTES RECEIVABLE
2,500
Beg. bal.
5/4
End. bal.
INVENTORY
8,000 5/7
5,000 5/23
7,150
Beg. bal.
BUILDING
12,000
5/15
NOTES PAYABLE
2,500 Beg. bal.
End. bal.
3,850
2,000
12,500
10,000
5/3
ACCOUNTS PAYABLE
3,000 Beg. bal.
5/4
End. bal.
6,000
5,000
8,000
RETAINED EARNINGS
Beg. bal.
9,000
3.
CAPITAL STOCK
Beg. bal.
5/21
End. bal.
15,000
1,000
16,000
SALES REVENUE
5/7
5/23
End. bal.
5,000
3,750
8,750
5/25
SALARIES EXPENSE
1,000
5/26
RENT EXPENSE
250
Jethro Company
Trial Balance
May 31, 2012
Debits
Cash...........................................................................................
$12,250
Notes Receivable......................................................................
2,500
Accounts Receivable.................................................................
2,000
Inventory...................................................................................
7,150
Land..........................................................................................
6,500
Building.....................................................................................
12,000
Furniture....................................................................................
2,250
Credits
Notes Payable............................................................................
$10,000
Accounts Payable......................................................................
8,000
Capital Stock.............................................................................
16,000
Retained Earnings.....................................................................
9,000
Sales Revenue...........................................................................
8,750
5,850
Salaries Expense.......................................................................
1,000
Rent Expense............................................................................
250
Totals...................................................................................
$51,750
$51,750