The following transactions occurred during March 2018 for the Wainwright Corpora
ID: 2398772 • Letter: T
Question
The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 40,000 shares of common stock in exchange for $400,000 in cash. 2. Purchased equipment at a cost of $50,000. $15,000 cash was paid and a note payable was signed for the balance owed. 3. Purchased inventory on account at a cost of $98,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $170,000. The cost of the goods sold was $80,000. 5. Paid $6,000 in rent on the warehouse building for the month of March. 6. Paid $7,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018. 7. Paid $80,000 on account for the merchandise purchased in 3. 8. Collected $65,000 from customers on account. 9. Recorded depreciation expense of $2,000 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.
Explanation / Answer
Capital A/c
To balance c/d
400000
By Cash
400000
400000
400000
By balance b/d
400000
Cash A/c
To common stock
400000
By Equipment
15000
To Account Receivable
65000
By Rent
6000
By Prepaid Insurance
7000
By Account Payable
80000
By Balance c/d
357000
465000
465000
To balance b/d
357000
Equipment A/c
To cash
15000
By Depreciation
2000
To Notes Payable
35000
By balance c/d
48000
50000
50000
To balance b/d
48000
Notes Payable A/c
To balance c/d
35000
By Equipment
35000
35000
35000
By balance b/d
35000
Purchase A/c
To Account Payable
98000
By balance c/d
98000
98000
98000
To balance b/d
98000
Accounts Payable A/c
To Cash
80000
By Purchase
98000
To balance c/d
18000
98000
98000
By balance b/d
18000
Sales A/c
To balance c/d
170000
By Account Receivable
170000
170000
170000
By balance b/d
170000
Account Receivable A/c
To Sales
170000
By Cash
65000
By Balance c/d
105000
170000
170000
To balance b/d
105000
Rent A/c
To cash
6000
By Balance c/d
6000
6000
6000
To balance b/d
6000
Depreciation A/c
To Equipment
2000
By Balance c/d
2000
2000
2000
To balance b/d
2000
Prepaid Insurance A/c
To Cash
7000
By Balance c/d
7000
7000
7000
To balance b/d
7000
Trial Balance as on 31 March 2018:-
S.No
Account Titles
Debit
Credit
Cash A/c
357000
Equipment A/c
48000
Account Receivable A/c
105000
Prepaid Insurance A/c
7000
Purchase A/c
98000
Rent A/c
6000
Depreciation A/c
2000
Capital A/c
400000
Notes Payable A/c
35000
Account Payable A/c
18000
Sales A/c
170000
Total
623000
623000
To balance c/d
400000
By Cash
400000
400000
400000
By balance b/d
400000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.