In: Accounting
Create a trial balance with the following information:
DR. a. Mr. Reed opened a print service company, Print It, on Jan 1 and gave the company $15000 in cash and a piece of land valued at $65000 in exchange for common stock. b. On Jan 1 Print It paid $7500 for the first 6 months of rent. c. Print It paid cash for $1000 of office supplies on Jan 15 d. Print It signed a 10,000 notes payable on Feb 1 to purchase the printing equipment necessary for operation. The equipment is expected to last for 10 years and have a salvage value of $1000. e. Feb 5 Print It completed a $700 print service and billed the customer for the job. f. Feb 15 Print it purchased another $120 of office supplies on account. g. Feb 25 Print it received $1500 from a customer for 3 months’ worth of printing services to begin on Mar 1. h. On March 5 Print It paid its only employee $2500 for work completed in February. i. On March 31 Print It adjusted for completing one month of services from the customer transaction that took place on Feb 25. j. On March 31 Print It did a count of office supplies and found that there were $475 worth of supplies still available. k. March 31, Print It adjusted for the first quarter’s rent. l. Mar 31, Print It adjusted for the first quarter of depreciation on equipment m. As of March 31, Print It owed its employee $2500 in wages, but the wages won’t be paid out until April 5. n. No dividends were paid out for the quarter.
Trial Balance of Print It for the quarter ended March 31, XXXX | ||||
Particulars | Debit | Credit | Transaction Reference or Working Note Reference | |
Cash | $ 5,500 | WN 1 | ||
Land | $ 65,000 | a. Jan 1: Invested by Mr.Reed | ||
Common stock | $ 80,000 | a. Jan 1: Invested by Mr.Reed Cash $15,000 and Land $65,000 in exchange of common stock | ||
Rent expense | $ 3,750 | b. Jan 1: Rent paid for 6
months $7,500; k. March 31, Print It adjusted for the first quarter’s rent. Out of which 3 months rent is expensed off and balance to be treated as prepayment; (ie.) $3,750 is expense and $3,750 is prepayment |
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Prepaid rent | $ 3,750 | |||
Purchase of Office supplies | $ 645 | WN 2 | ||
Notes Payable | $ 10,000 | d. Signed a 10,000 notes payable on Feb 1 to purchase the printing equipment | ||
Printing equipment | $ 10,000 | d. Signed a 10,000 notes payable on Feb 1 to purchase the printing equipment | ||
Depreciation expense | $ 225 | The equipment is expected to last for 10
years and have a salvage value of $1000 l. Mar 31, Print It adjusted for the first quarter of depreciation on equipment - WN 3 |
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Accumulated depreciation | $ 225 | WN 3 | ||
Sale of service | $ 1,200 | WN 4 | ||
Accrued Revenue | $ 1,000 | g. Feb 25 received $1500 from a customer
for 3 months’ worth of printing services to begin on Mar 1
and i. On March 31 Print It adjusted for completing one month of services from the customer transaction that took place on Feb 25. (ie) 1500*2 months/3 months |
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Inventory of office supplies | $ 475 | j. did a count of office supplies and found that there were $475 worth of supplies still available - Inventory | ||
Salaries | $ 5,000 | WN7 | ||
Salary Payable | $ 2,500 | m. As of March 31, Print It owed its employee $2500 in wages, but the wages won’t be paid out until April 5 | ||
Accounts Receivable | $ 700 | WN 5 | ||
Accounts payable | $ 120 | WN 6 | ||
Total | $ 95,045 | $ 95,045 | ||
WN1: Cash | ||||
Jan 1 Invested by Mr. Reed | $ 15,000 | |||
Jan 1 Rent paid for 6 months | $ (7,500) | |||
Jan 1 Purchase of office supplies | $ (1,000) | |||
g. Feb 25 received $1500 from a customer for 3 months’ worth of printing services to begin on Mar 1 | $ 1,500 | |||
h. On March 5 Print It paid its only employee $2500 for work completed in February. | $ (2,500) | |||
TOTAL | $ 5,500 | |||
WN 2: Purchase of Office supplies | ||||
c. Jan 1 Purchase of office supplies | $ 1,000 | |||
f. Feb 15 Purchase of office supplies on account | $ 120 | |||
$ 1,120 | ||||
Less: | ||||
j. did a count of office supplies and found that there were $475 worth of supplies still available - Inventory | $ (475) | |||
TOTAL | $ 645 | |||
WN3: Depreciation | ||||
Cost | $ 10,000 | |||
Less: Salvage value | $ 1,000 | |||
$ 9,000 | ||||
Life | 10 years | |||
Depreciation p.a. (9000/10) | $ 900 | |||
Depreciation per quarter (900/4) | $ 225 | |||
WN4: Sales | ||||
e. Feb5 Printit completed a service and billed the customer | $ 700 | |||
g. Feb 25 received $1500 from
a customer for 3 months’ worth of printing services to begin on Mar
1 and i. On March 31 Print It adjusted for completing one month of services from the customer transaction that took place on Feb 25. (ie) 1500*1 month/3 months |
$ 500 | |||
TOTAL | $ 1,200 | |||
WN5: Accounts Receivable | ||||
e. Feb5 Printit completed a service and billed the customer | $ 700 | |||
WN6: Accounts payable | ||||
f. Feb 15 Purchase of office supplies on account | $ 120 | |||
WN7: Salaries | ||||
h. On March 5 Print It paid its only employee $2500 for work completed in February. | $ 2,500 | |||
m. As of March 31, Print It owed its employee $2500 in wages, but the wages won’t be paid out until April 5 | $ 2,500 | |||
TOTAL | $ 5,000 | |||
n. No dividends were paid out for the quarter. - No entries required | ||||