Question

Selected transactions for Crane Corporation during September 2018, its first month in business, are presented below:

Sept.	1		Issued common shares in exchange for $18,000 cash.
	2		Paid $1,600 cash for rent for the month of September.
	5		Purchased equipment for $9,800, paying $1,800 in cash and the balance on account.
	8		Earned $7,300 in revenue, receiving $900 cash and $6,400 on account of services provided.
	12		Incurred $600 in advertising expenses on account.
	20		Paid $3,000 for repairs and maintenance expenses.
	25		Paid $4,800 cash on balance owed for equipment.
	27		Incurred and paid income taxes for the month amounting to $1,000.
	30		Declared and paid a $600 cash dividend.

Prepare a trial balance at September 30, 2018.

CRANE CORPORATION Trial Balance Year Ended September 30, 2018Month Ended September 30 OR 2018September 30, 2018
	Debit	Credit
	$	$
Totals	$	$

Answer 1

Solution:

CRANE CORPORATION
Trial balance
Year Ended September 30, 2018
	Debit	Credit
Cash	$                  5,500	$                     -
Accounts Receivable	$                  6,400	$                     -
Equipment	$                  9,800	$                     -
Accounts Payable ($8000- $4800)	$                         -	$              3,200
Common Stock	$                         -	$           18,000
Service Revenue	$                         -	$              7,300
Rent Expense	$                  1,600	$                     -
Advertising Expense	$                     600	$                     -
Repairs ans Maintenance Expense	$                  3,000	$                     -
Income Tax Expense	$                  1,000	$                     -
Dividend	$                     600	$                     -
Totals	$               28,500	$           28,500

Notes:

1) Cash = $18000 (Common stock) - $1600(rent expense) -$1800 (equipment purchase) +$ 900 ( Revenue ) -$ 600 (Advertisement Expense ) - $3000 ( Repairs ) - $4800(account payable ) - $1000 (Income tax) - $600 ( Dividend ) = $5,500