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The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.
1. Issued 47,000 shares of common stock in exchange for $470,000 in cash.
2. Purchased equipment at a cost of $57,000. $18,500 cash was paid and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $112,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $205,000. The cost of the goods sold was $87,000.
5. Paid $6,700 in rent on the warehouse building for the month of March.
6. Paid $7,700 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018.
7. Paid $87,000 on account for the merchandise purchased in 3.
8. Collected $72,000 from customers on account.
9. Recorded depreciation expense of $2,700 for the month on the equipment.
Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts is zero. Prepare a trial balance from the ending account balances.
My trial balance totals dont equal each other. Please help
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Expert Answer
| Make changes in following T- Account | ||||||
| inventory | ||||||
| beg bal | ||||||
| 3 | 112,000 | 4 | 87,000 | |||
| end bal | 25,000 | |||||
| Trial Balance | ||||||
| Cash | 422,100 | |||||
| Accounts receivable | 133,000 | |||||
| Inventory | 25,000 | |||||
| prepaid insurance | 7,700 | |||||
| Equipment | 57,000 | |||||
| Accumulated Depreciation | 2,700 | |||||
| Accounts payable | 25,000 | |||||
| Note payable | 38,500 | |||||
| Common Stock | 470,000 | |||||
| Sales revenue | 205,000 | |||||
| Cost of goods sold | 87,000 | |||||
| Rent expense | 6,700 | |||||
| Depreciation expense | 2,700 | |||||
| totals | 741,200 | 741200 | ||||
