Acquired $18,500 cash from the issue of common stock. Purchased inventory for $7,000 cash. Sold inventory costing $4,200 for $7,140 cash. Paid $850 for advertising expense. Required. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits.

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Business

Amiyah Shaw

21 January, 01:35

Acquired $18,500 cash from the issue of common stock. Purchased inventory for $7,000 cash. Sold inventory costing $4,200 for $7,140 cash. Paid $850 for advertising expense. Required. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits.

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Richard Steele · Answer 1

Entries

On the issuance of stock

Cash 18500

Share capital 18500

On purchase of inventory

Stock 7000

Cash 7000

On the disposal of inventory

Cash 7140

inventory 4200

Gain On disposal 2940

Advetisement Expense

Expense 850

Cash 850

T-Accounts

Cash and Bank

Opening 0

Share capital 18500 Stock 7000

Sale 7140 Adv. Expense 850

Closing 17790

Stock

Opening 0

Cash 7000 Cash Sale 4200

Closing 2800

Share Capital

opening 0

Cash 18500

Closing 18500

Gain On disposal

opening 0

Cash 2940

Closing 2940

Advetisement Expense

Opening 0

Cash 850 profit and loss 850

Closing 0

the trail balance is prepared at end of reporting to reconcile the closing debit credit during the year occurred on transactions. closing balace are put in according to their nature such as liability and equity account is credit nature account and asset and expense is debit nature account as prepared below

Trail Balance

Particular Debit Credit

Cash 17790

Stock 2800

Share Capital 18500

Gain 2940

Advvertisement 850

Closing Balance 21440 21440