Question

What would the unadjusted trial balance look like for the following transactions?

1-Jan	Cash	4,000
	Common Stock		4,000
2-Jan	Cash	5000
	Notes Payable		5000
3-Jan	Rent Expense	900
	Cash		900
4-Jan	Supplies	450
	Accounts Payable		450
5-Jan	Equipment	7200
	Cash		7200
6-Jan	Equipment	2850
	Cash		1350
	Accounts Payable		1500
7-Jan	Prepaid Advertisement	375
	Advertisement Expense	125
	Cash		500
8-Jan	Insurance Expense	225
	Cash		225
9-Jan	Cash	2625
	Service Revenue		2625
10-Jan	Cash	5125
	Unearned Service Revenue		5125
11-Jan	Cash	1500
	Accounts Receivable		1500
12-Jan	Accounts Payable	600
	Cash		600
13-Jan	Cash	1300
	Accounts Receivable		1300
14-Jan	Dividends	1000
	Cash		1000

Answer 1

The unadjusted trial balance for the above transactions is shown as follows:-

  Trial Balance (Amounts in $)

Account Titles	Debit	Credit
Cash (WN 1)	7,775
Common Stock		4,000
Notes Payable		5,000
Rent Expense	900
Supplies	450
Accounts Payable (450+1,500-600)		1,350
Equipment (7,200+2,850)	10,050
Prepaid Advertisement	375
Advertisement Expense	125
Insurance Expense	225
Service Revenue		2,625
Unearned Service Revenue		5,125
Accounts Receivable (1,500+1,300)		2,800
Dividends	1,000
Total	20,900	20,900

Working Notes:-

1) Calculation of Ending Cash Balance (Amounts in $)

Issue of Common Stock	4,000
Add: Issue of Notes payable	5,000
Less: Rent expense paid	(900)
Less: Purchase of Equipment (7,200+1,350)	(8,550)
Less: Advertisement expense paid	(500)
Less: Insurance expense paid	(225)
Add: Service Revenue received (2,625+5,125)	7,750
Add: Received from accounts receivable (1,500+1,300)	2,800
Less: Cash paid to Accounts payable	(600)
Less: Dividends Paid	(1,000)
Ending Cash Balance	7,775