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2 September, 08:21

Acquired $30,000 cash from the issue of common stock. Purchased inventory for $15,000 cash. Sold inventory costing $9,000 for $20,000 cash. Paid $1,500 for advertising expense. Required a. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits.

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  1. 2 September, 08:52
    0
    The answer is given below

    Explanation:

    a. Cash Dr.$30,000

    Common stock Cr.$30,000

    Inventory Dr.$15,000

    Cash Cr.$15,000

    Cash Dr.$20,000

    Sales Revenue Cr.$20,000

    Cost of Goods Sold Dr.$9,000

    Inventory Cr.$9,000

    Advertising Expense Dr.$1,500

    Cash Cr.$1,500

    b. Cash

    Dr. Cr.

    Common Stock 30,000 Inventory 15,000

    Sales 20,000 Advertising Exp 1,500

    C/F 33,500

    Common Stocks

    Dr. Cr.

    C/F 30,000 Cash 30,000

    Inventory

    Dr. Cr.

    Cash 15,000 Cost of Goods Sold 9,000

    C/F 6,000

    Sales

    Dr. Cr.

    C/F 20,000 Cash 20,000

    Cost of Goods Sold

    Dr. Cr.

    Inventory 9,000 C/F 9,000

    Advertising Expense

    Dr. Cr.

    Cash 1,500 C/F 1,500

    c. Trail Balance

    Dr. Cr.

    Cash 33,500

    Common Stocks 30,000

    Inventory 6,000

    Sales 20,000

    Cost of Goods sold 9,000

    Advertising Expense 1,500

    Total 50,000 50,000
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