Trial Balance

1. Record the following journal entries for Taylor Company for the month of March:

a. Borrowed $4,500 from Local Bank and Trust

b. Investors contributed $10,000 in cash for shares of stock

c. Bought inventory costing $2,000 on credit

d. Sold inventory that originally cost $400 for $600 on credit

e. Purchased a new piece of equipment for $500 cash

f. Collected $600 in cash from sale of inventory in (d) above

g. Paid for inventory purchased in (c) above

h. Paid $1,200 in cash for an insurance policy that covers the next year

i. Employees earned $3,000 during the month but have not yet been paid

j. Paid employees $2,900 for wages earned and recorded during February

2.

For each of the following transactions, determine if Raymond Corporation has earned revenue during the month of May and, if so, how much it has earned.

a. Customers paid Raymond $1,500 for work Raymond will perform in June.

b. Customers purchased $6,000 of inventory for which they have not yet paid.

c. Raymond performed work for customers and was paid $3,400 in cash.

d. Customers paid Raymond $2,300 for inventory purchased in April.

3. Record the journal entries for number 2 above.

4. Determine the missing account balance in the following trial balance:

5. State which balance, debit, or credit is normally held by the following accounts:

a. Cash

b. Dividends

c. Notes payable

d. Unearned revenue

e. Cost of goods sold

f. Prepaid rent

g. Accounts receivable

h. Capital stock

6. Near the end of her freshman year at college, Heather Miller is faced with the decision of whether to get a summer job, go to summer school, or start a summer dress making business. Heather has had some experience designing and sewing and believes it might be the most lucrative of her summer alternatives. She starts “Sew Cool.”

During June, the first month of business, the following occur:

a. Heather deposits $1,000 of her own money into Sew Cool’s checking account.

b. Sew Cool purchases equipment for $1,000. The company signs a note payable for this purchase.

c. Sew Cool purchases $1,000 in sewing supplies and material in cash.

d. Sew Cool gives Heather’s parents a check for $80 for rent and utilities.

e. Heather sews and sells twenty dresses during the month. Each dress has a price of $60. Cash is received for twelve of the dresses, with customers owing for the remaining eight.

f. The dresses sold above cost $35 each to make.

g. Sew Cool purchases advertising for $50 cash.

h. Sew Cool pays Heather a cash dividend of $10 cash.

i. Sew Cool’s taxes, paid in cash, amount to $87.

i. Prepare journal entries for the above transactions.

ii. Prepare T-accounts for each account used.

iii. Prepare a trial balance for June.