Question

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

1. Issued 37,000 shares of common stock in exchange for $370,000 in cash.
2. Purchased equipment at a cost of $47,000. $13,500 cash was paid and a notes payable to the seller was signed for the balance owed.
3. Purchased inventory on account at a cost of $92,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $155,000. The cost of the goods sold was $77,000.
5. Paid $5,700 in rent on the warehouse building for the month of March.
6. Paid $6,700 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021.
7. Paid $77,000 on account for the merchandise purchased in 3.
8. Collected $62,000 from customers on account.
9. Recorded depreciation expense of $1,700 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.

Answer 1

CASH ACCOUNT
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
COMMON STOCK	3,70,000.00	EQUIPMENT	13,500.00
ACCOUNT RECEIVABLES	62,000.00	RENT	5,700.00
		PREPAID INSURANCE	6,700.00
		ACCOUNTS PAYABLE	77,000.00
		BALANCE	3,29,100.00
TOTAL	4,32,000.00	TOTAL	4,32,000.00
COMMON STOCK
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
CLOSING BALANCE	3,70,000.00	CASH	3,70,000.00
TOTAL	3,70,000.00	TOTAL	3,70,000.00
EQUIPMENTS
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
CASH	13,500.00	CLSOING BALANCE	13,500.00
TOTAL	13,500.00	TOTAL	13,500.00
NOTES PAYABLES
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
CLSOING BALANCE	33,500.00	EQUIPMENTS	33,500.00
TOTAL	33,500.00	TOTAL	33,500.00
INVENTORY
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
ACCOUNTS PAYABLES	92,000.00	COST OF GOODS SOLD	77,000.00
		CLOSING BALANCE	15,000.00
TOTAL	92,000.00	TOTAL	92,000.00
ACCOUNTS PAYABLES
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
CASH	77,000.00	INVENTORY	92,000.00
CLOSING BALANCE	15,000.00
TOTAL	92,000.00	TOTAL	92,000.00
ACCOUNT RECEIVABLES
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
SALES REVENUE	1,55,000.00	CASH	62,000.00
		CLOSING BALANCE	93,000.00
TOTAL	1,55,000.00	TOTAL	1,55,000.00
SALES REVENUE
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
CLOSING BALANCE	1,55,000.00	ACCOUNT RECEIVABLES	1,55,000.00
TOTAL	1,55,000.00	TOTAL	1,55,000.00
COST OF GOODS SOLD
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
INVENTORY	77,000.00	CLSOING BALANCE	77,000.00
TOTAL	77,000.00	TOTAL	77,000.00
RENT
ACCOUNT HEAD	DEBIT	ACCOUNT HEAD	CREDIT
CASH	5,700.00	CLSOING BALANCE	5,700.00
TOTAL	5,700.00	TOTAL	5,700.00
PREPAID INSURANCE
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