Question

The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

1. Issued 34,000 shares of common stock in exchange for $340,000 in cash.
2. Purchased equipment at a cost of $44,000. $12,000 cash was paid and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $86,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $140,000. The cost of the goods sold was $74,000.
5. Paid $5,400 in rent on the warehouse building for the month of March.
6. Paid $6,400 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018.
7. Paid $74,000 on account for the merchandise purchased in 3.
8. Collected $59,000 from customers on account.
9. Recorded depreciation expense of $1,400 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

Cash
Beg Bal	-
1	340,000.00	12,000.00	2
8	59,000.00	5,400.00	5
		6,400.00	6
		74,000.00	7
End Bal	301,200.00

Accounts Receivable
Beg Bal	-
4	140,000.00	59,000.00	8
End Bal	81,000.00

Equipment
Beg Bal	-
2	44,000.00
End Bal	44,000.00

Inventory
Beg Bal	-
3	86,000.00	74,000.00	4
End Bal	12,000.00

Prepaid Insurance
Beg Bal	-
6	6,400.00
End Bal	6,400.00

Common Stock
Beg Bal		-
		340,000.00	1
End Bal		340,000.00

Accounts payable
Beg Bal		-
7	74,000.00	86,000.00	3
End Bal		12,000.00

Notes Payable
Beg Bal		-
		32,000.00	2
End Bal		32,000.00

Accumulated Depreciation
Beg Bal		-
		1,400.00	9
End Bal		1,400.00

Sales Revenue
Beg Bal		-
		140,000.00	4
End Bal		140,000.00

Rent Expense
Beg Bal	-
5	5,400.00
End Bal	5,400.00

Cost of Goods Sold
Beg Bal	-
4	74,000.00
End Bal	74,000.00

Depreciation Expense
Beg Bal	-
9	1,400.00
End Bal	1,400.00

Cash	301,200.00
Accounts Receivable	81,000.00
Equipment	44,000.00
Inventory	12,000.00
Prepaid Insurance	6,400.00
Common Stock		340,000.00
Accounts payable		12,000.00
Notes Payable		32,000.00
Accumulated Depreciation		1,400.00
Sales Revenue		140,000.00
Rent Expense	5,400.00
Cost of Goods Sold	74,000.00
Depreciation Expense	1,400.00
Total	525,400.00	525,400.00