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. Prepare a trial balance from the ending account balances.

Answer 1

T-accounts are as prepared below:

Cash
Particulars	Debit	Particulars	Credit
Beg bal	0
1	370,000	2	13,500
8	62,000	5	5,700
		6	6,700
		7	77,000
	432,000		102,900
End Bal	329,100
Account Receivable
Particulars	Debit	Particulars	Credit
Beg bal	0	8	62,000
4	155,000
	155,000		62,000
End Bal	93,000
Inventory
Particulars	Debit	Particulars	Credit
Beg bal	0	4	77,000
3	92,000
	92,000		77,000
End Bal	15,000
Prepaid Rent
Particulars	Debit	Particulars	Credit
Beg bal	0
6	6,700
	6,700		0
End Bal	6,700
Equipment
Particulars	Debit	Particulars	Credit
Beg bal	0
2	47,000
	47,000		0
End Bal	47,000
Accounts Payable
Particulars	Debit	Particulars	Credit
7	77,000	3	92,000
	77,000		92,000
End Bal			15,000
Notes Payable
Particulars	Debit	Particulars	Credit
		2	33,500
	0		33,500
End Bal			33,500
Common Stock
Particulars	Debit	Particulars	Credit
		1	370,000
	0		370,000
End Bal			370,000
Sales
Particulars	Debit	Particulars	Credit
		4	155,000
	0		155,000
End Bal			155,000
Cost of Goods Sold
Particulars	Debit	Particulars	Credit
Beg bal	0
4	77,000
End Bal	77,000		0
Rent Expense
Particulars	Debit	Particulars	Credit
5	5,700
	5,700
End Bal	5,700
Depreciation Expense
Particulars	Debit	Particulars	Credit
9	1,700
	1,700
End Bal	1,700
Accumulated dep Expense
Particulars	Debit	Particulars	Credit
		9	1,700
	0		1,700
		End Bal	1,700

Trial Balance
	Debit	Credit
Cash	329,100
Account Receivable	93,000
Inventory	15,000
Prepaid Rent	6,700
Equipment	47,000
Accounts Payable		15,000
Accumulated dep Expense		1,700
Notes Payable		33,500
Common Stock		370,000
Sales		155,000
Cost of Goods Sold	77,000
Rent Expense	5,700
Depreciation Expense	1,700
Total	575,200	575,200