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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.

Respuesta :

haseebkhuhro256

Answer:

Explanation:

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

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