Problem 2-1 Accounting cycle through unadjusted trial balance [LO2-2, 2-3] Halog

Question

Problem 2-1 Accounting cycle through unadjusted trial balance [LO2-2, 2-3] Halogen Laminated Products Company began business on January 1, 2018. During January, the following transactions occurred Jan. 1 Issued common stock in exchange for $107,000 cash 2 Purchased inventory on account for $42,000 (the perpetual inventory system is used) 4 Paid an insurance company $3,240 for a one-year insurance policy. 10 Sold merchandise on account for $12,700. The cost of the merchandise was $7,700. 15 Borrowed $37,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months. 20 Paid employees $6,700 salaries and wages for the first half of the month. 22 Sold merchandise for $10,700 cash. The cost of the merchandise was $6,700. 24 Paid $15,700 to suppliers for the merchandise purchased on January 2. 26 Collected $6,350 on account from customers. 28 Paid $1,100 to the local utility company for January gas and electricity 30 Paid $4,700 rent for the building. $2,350 was for January rent, and $2,350 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

Explanation / Answer

01-Jan Cash 107000          Common stock 107000 02-Jan Inventory 42000            Accounts payable 42000 04-Jan Prepaid insurance 3240            Cash 3240 10-Jan Accounts receivable 12700               Sales revenue 12700 Cost of goods sold 7700              Inventory 7700 15-Jan Cash 37000         Notes payable 37000 20-Jan Salaries and wages expense 6700              Cash 6700 22-Jan Cash 10700               Sales revenue 10700 Cost of goods sold 6700              Inventory 6700 24-Jan Accounts payable 15700              Cash 15700 26-Jan Cash 6350            Accounts receivable 6350 28-Jan Utilities expense 1100             Cash 1100 30-Jan rent expense 2350 Prepaid rent 2350            Cash 4700 Unadjusted trial balnce Debit Credit Cash 129610 Accounts receivable 6350 Inventory 27600 Prepaid insurance 3240 Prepaid rent 2350 Accounts payable 26300 Notes payable 37000 Common stock 107000 Sales revenue 23400 Cost of goods sold 14400 Salaries and wages expense 6700 Rent expense 2350 Utilities expense 1100 Total 193700 193700

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