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Chapter 2: 23E (page 96)

Question:Preparing a trial balance from T-accounts

The T-accounts of McMahon Farm Equipment Repair follow as of May 31, 2018.

ASSETS Salaries Payable LIABILITIES EQUITY Retained Earnings 4,000 29,000 Notes Payable 3,500 400 Accounts Receivable 14,000 Land 29,000 Building 16,000 Equipment Common Stock Contributed Capital Dividends Property Tax Expense 1,000 Advertising Expense 280

Cash 31,000 1,800 400 14,000 4,200 800 4,000 2,000 3,380

Service Revenue 3,500 1,800 4,200 31,000 2

Short Answer

Expert verified

The total forthe debit side and credit side is $80,700

Step by step solution

01

Step-by-Step SolutionStep 1: Computation of Cash Balance

CashBalance=Debits-Credits=$31,000+$1,800+$400-$14,000-$800-$4,000-$2,000-$3,380=$9,020

02

Preparation of Trial Balance

McMahon Farm Equipment Repair

Trial Balance

May 31, 2018

Account title

Debit ($)

Credit ($)

Cash

$9,020

Accounts Receivables

$3,100

Land

$14,000

Building

$29,000

Equipment

$16,000

Salaries Payable

$3,400

Notes Payable

$25,000

Common Stock

$47,000

Dividends

$2,000

Service Revenue

$5,300

Salaries Expense

$6,300

Property Tax Expense

$1,000

Advertising Expense

$280

Total

$80,700

$80,700

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Most popular questions from this chapter

Question:Courtney Meehan has trouble keeping her debits and credits equal. During a recent month, Courtney made the following accounting errors:

a. In preparing the trial balance, Courtney omitted a \(5,000 Notes Payable. The debit to Cash was correct.

b. Courtney posted a \)1,000 Utilities Expense as \(100. The credit to Cash was correct.

c. In recording a \)600 payment on account, Courtney debited Furniture instead of Accounts Payable.

d. In journalizing a receipt of cash for service revenue, Courtney debited Cash for \(50 instead of the correct amount of \)500. The credit was correct.

e. Courtney recorded a \(210 purchase of office supplies on account by debiting Office Supplies for \)120 and crediting Accounts Payable for $120.

Requirements 1. For each of these errors, state whether total debits equal total credits on the trial balance.

Calculating the balance of a T-account

Accounts Payable

May 2 6,000 21,000 May 1

May 22 11,500 500 May 5

8,500 May 15

500 May 23

Calculate the Accounts Payable balance.

Explain the five steps in journalizing and posting transactions.

Creating a chart of accounts Raymond Autobody Shop has the following accounts:

Accounts Payable Service Revenue

Cash Equipment

Utilities Expense Common Stock

Automotive Supplies Advertising Expense

Dividends Unearned Revenue

Retained Earnings

Create a chart of accounts for Raymond Autobody Shop using the standard numbering system. Each account is separated by a factor of 10. For example, the first asset account will be 100 and the next asset account will 110

For each account, identify if the change would be recorded as a debit (DR) or credit (CR).

11. Increase to Cash 16. Increase to Interest Revenue

12. Decrease to Accounts Payable 17. Increase to Rent Expense

13. Increase to Common Stock 18. Decrease to Office Supplies

14. Increase to Unearned Revenue 19. Increase to Prepaid Rent

15. Decrease to Accounts Receivable 20. Increase to Notes Payable
See all solutions

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