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Chapter 2: 26E (page 98)

Question:The accountant for Countryside Painting Specialists is having a hard time preparing the trial balance as of November 30, 2018:

Account Title Debit Credit

Accounts Receivable 1,300

PaintingEquipment 13,500

Cash 12,100

Advertising Expense 550

Dividends 3,500

Accounts Payable 3,300

Rent Expense 1,800

Common Stock 15,000

Service Revenue 15,600

Unearned Revenue 1,700

Salaries Expense 2,400

Office Supplies 200

Utilities Expense 250

Total 48,600 22,600

Prepare the corrected trial balance as of November 30, 2018. Assume all amounts are correct and all accounts have normal balances.

Short Answer

Expert verified

The advertising expense is the cost of promotion and the corrected trial balance is prepared with a total of$35,600

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of advertising expense

The advertising expense is defined as the cost incurred by the business for the promotion of the product or the business

02

Preparation of corrected trial balance

COUNTRYSIDE PAINTING SPECIALISTS

Trial Balance

November 30, 2018

Accounts Titles

Debit ($)

Credit ($)

Painting Equipment

$13,500

Cash

$12,100

Accounts Receivables

$1,300

Advertising Expense

$550

Dividends

$3,500

Accounts Payable

$3,300

Rent Expense

$1,800

Common Stock

$15,000

Service Revenue

$15,600

Unearned Revenue

$1,700

Salaries Expense

$2,400

Office Supplies

$200

Utilities Expense

$250

Total

$35,600

$35,600

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Most popular questions from this chapter

When are debits increases? When are debits decreases?

What does a ledger show? What鈥檚 the difference between a ledger and a chart of accounts?

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions:

Cash 11,000

Office Supplies 400

Accounts Receivable 16,500

Land 30,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 52,300

Dividends 0

Rent Expense 800

Salaries Expense 5,600

Service Revenue 8,200

Total Balance \( 64,300 64,300

During April, the business completed the following transactions:

Apr. 4 Collected \)2,500 cash from a client on account.

8 Performed tax services for a client on account, \(5,400.

13 Paid \)3,000 on account.

14 Purchased furniture on account, \(3,600.

15 Merry contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of \)9,500.

18 Purchased office supplies on account, \(900.

19 Received \)2,700 for tax services performed on April 8.

20 Paid cash dividends of \(6,500.

21 Received \)5,700 cash for consulting work completed.

24 Received \(2,400 cash for accounting services to be completed next month.

27 Paid office rent, \)600.

28 Paid employee salary, $1,700.

Requirements

  1. Record the April transactions in the journal. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Furniture; Automobile; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; and Rent Expense. Include an explanation for each entry

Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance

Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions:

Nov. 1 Received \(41,000 cash and issued common stock to Stewart.

4 Purchased office supplies, \)1,200, and furniture, \(2,300, on account.

6 Performed services for a law firm and received \)2,100 cash.

7 Paid \(27,000 cash to acquire land to be used in operations.

10 Performed services for a hotel and received its promise to pay the \)800 within one week.

14 Paid for the furniture purchased on November 4 on account.

15 Paid assistant鈥檚 semimonthly salary, \(1,470.

17 Received cash on account, \)500.

20 Prepared a design for a school on account, \(680.

25 Received \)1,900 cash for design services to be performed in December.

28 Received \(3,100 cash for consulting with Plummer & Gordon.

29 Paid \)840 cash for a 12-month insurance policy starting on December 1.

30 Paid assistant鈥檚 semimonthly salary, \(1,470. 30 Paid monthly rent expense, \)650.

30 Received a bill for utilities, \(650. The bill will be paid next month.

30 Paid cash dividends of \)2,800.

Requirements 2. Open a T-account for each of the accounts.

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
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