Question

The following transactions take place in March 2017:

1. The owner starts the firm with $45,000 in cash on March 1, 2017.
2. A truck was bought for $21,000 cash on March 2, 2017.
3. Borrowed bank loan for $100,000 on March 3, 2017.
4. Rental received from a tenant for cash $900 on March 4, 2017.
5. Paid salaries by cash $4,000 on March 5, 2017.

Required:

1. Journalize all transactions.
2. Open and record the transactions in T-accounts.
3. Prepare a Trial Balance.
4. Prepare the financial statements.

Answer 1

Journalizing the Transactions:-

General Journal

For the Month of March,2017

Date	Accounts Title	Debit	Credit
March 1	Cash	$45,000
	Owner's Capital		$45,000
March 2	Truck	$21,000
	Cash		$21,000
March 3	Cash	$100,000
	Loan Payable		$100,000
March 4	Cash	$900
	Rent Revenue		$900
March 5	Salaries Expense	$4,000
	Cash		$4,000

b. Recording the transactions into Appropriate T-accounts:-

Cash

Date	Amount	Date	Amount
March 1	$45,000	March 2	$21,000
3	100,000	5	4,000
4	900	Balance	$120,900
Total	$145,900	Total	$145,900
Ending Bal.	$120,900

Truck

Date	Amount	Date	Amount
March 2	$21,000
Ending Bal.	$21,000

Loan Payable

Date	Amount	Date	Amount
		March 3	$100,000
		Ending Bal.	$100,000

Owner's Capital

Date	Amount	Date	Amount
		March 1	$45,000
		Ending Bal.	$45,000

Rent Revenue

Date	Amount	Date	Amount
		March 4	$900
		Ending Bal.	$900

Salaries Expense

Date	Amount	Date	Amount
March 5	$4,000
Ending Bal.	$4,000

c. Preparing Trial Balance:-

Trial Balance

March,2017

Accounts Title	Debit	Credit
Cash	$120,900
Truck	21,000
Loan Payable		$100,000
Owner's Capital		45,000
Rent Revenue		900
Salaries Expense	4,000
Total	$145,900	$145,900

d. Preparing Financial Statements:-

Income Statement

March,2017

Accounts	Amount
Rent Revenue	$900
Less:- Expense
Salaries Expense	($4,000)
Net Loss	$3,100

Statement of Owner's Equity

March ,2017

Accounts	Amount
Owner's Capital	$45,000
Less:- Net Loss	(3,100)
Owner's Capital, Ending	$41,900

Balance Sheet

March ,2017

Accounts	Amount	Amount
Assets:-
Cash	$120,900
Truck	21,000
Total Assets		$141,900
Liabilities and Owner's Equity:-
Liabilities:-
Loan Payable	$100,000
Total Liabilities		$100,000
Owner's Equity:-
Owner's Capital, Ending	$41,900
Total Owner's Equity		$41,900
Total Liabilities and Owner's Equity		$141,900