Question

Halogen Laminated Products Company began business on January 1, 2018. During January, the following transactions occurred:

Jan.		1		Issued common stock in exchange for $108,000 cash.
		2		Purchased inventory on account for $43,000 (the perpetual inventory system is used).
		4		Paid an insurance company $3,360 for a one-year insurance policy.
		10		Sold merchandise on account for $12,800. The cost of the merchandise was $7,800.
		15		Borrowed $38,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months.
		20		Paid employees $6,800 salaries and wages for the first half of the month.
		22		Sold merchandise for $10,800 cash. The cost of the merchandise was $6,800.
		24		Paid $15,800 to suppliers for the merchandise purchased on January 2.
		26		Collected $6,400 on account from customers.
		28		Paid $1,200 to the local utility company for January gas and electricity.
		30		Paid $4,800 rent for the building. $2,400 was for January rent, and $2,400 for February rent.

Required:
1. Prepare general journal entries to record each transaction.
2. Post the transactions into the appropriate T-accounts.
3. Prepare an unadjusted trial balance as of January 30, 2018.

Answer 1

1.

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	Cash	108000
	Common stock		108000
	(Common stock issued for cash)
2	Inventory	43000
	Accounts payable		43000
	(Inventory purchased on account)
4	Prepaid insurance	3360
	Cash		3360
	(One-year insurance paid)
10	Accounts receivable	12800
	Sales revenue		12800
	(Sales on account)
	Cost of goods sold	7800
	Inventory		7800
	(Cost of merchandise sold)
15	Cash	38000
	Notes payable		38000
	(Borrowing from bank against note)
20	Salaries and wages expense	6800
	Cash		6800
	(Salaries and wages paid)
22	Cash	10800
	Sales revenue		10800
	(Cash sales)
	Cost of goods sold	6800
	Inventory		6800
	(Cost of merchandise sold)
24	Accounts payable	15800
	Cash		15800
	(Payment on account)
26	Cash	6400
	Accounts receivable		6400
	(Collection on account)
28	Utility expense	1200
	Cash		1200
	(Utility bill paid)
30	Rent expense	2400
	Prepaid rent	2400
	Cash		4800
	(Rent paid for January and February)

2.

Cash					Accounts Receivable
Jan. 1	108000	3360	Jan. 4		Jan. 10	12800	6400	Jan. 26
15	38000	6800	20
22	10800	15800	24
26	6400	1200	28
		4800	30
End. Bal.	131240				End. Bal.	6400
Inventory					Prepaid Insurance
Jan. 2	43000	7800	Jan. 10		Jan. 4	3360
		6800	22
End. Bal.	28400				End. Bal.	3360
Prepaid Rent					Accounts Payable
Jan. 30	2400				Jan. 24	15800	43000	Jan. 2
End. Bal.	2400				End. Bal.		27200
Notes Payable					Common Stock
		38000	Jan. 15				108000	Jan. 1
End. Bal.		38000			End. Bal.		108000
Sales Revenue					Cost of Goods Sold
		12800	Jan. 10		Jan. 10	7800
		10800	22		22	6800
End. Bal.		23600			End. Bal.	14600
Salaries and Wages Expense					Utility Expense
Jan. 20	6800				Jan. 28	1200
End. Bal.	6800				End. Bal.	1200
Rent Expense
Jan. 30	2400
End. Bal.	2400

3.

Halogen Laminated Products Company
Unadjusted Trial Balance
January 30, 2018
Account	Debit	Credit
Cash	131240
Accounts receivable	6400
Inventory	28400
Prepaid insurance	3360
Prepaid rent	2400
Accounts payable		27200
Notes payable		38000
Common stock		108000
Sales revenue		23600
Cost of goods sold	14600
Salaries and wages expense	6800
Utility expense	1200
Rent expense	2400
Total $	196800	196800