Question

W. Weinstein, roofing contractor, began business on May 1 of the current year. The following transactions occurred during May:

1) Weinstein invested $25,000 of his personal funds in the business.
2) Purchased equipment on account, $2,400.
3) Paid the premium for a one-year liability insurance policy, $720.
4) Purchased supplies on account, $580.
5) Purchased a truck for $8,500; Weinstein paid $2,500 cash and gave a note payable for the balance.
6) Paid rent for May, $750.
7) Paid fuel bill for truck, $70.
8) Billed customers for services rendered, $9,200.
9) Paid $1,000 on account for equipment purchased in transaction (2).
10) Paid utilities expense for May, $120.
11) Received invoice for May advertising expense, to be paid in June, $150.
12) Paid employees' wages, $1,450.
13) Collected $5,300 on accounts receivable,
14) Withdrew $800 for personal expenses.
15) Counted supplies on hand at May 31; $320 worth remained,
16) Recorded the insurance expired at May 31, $60.

REQUIRED

(a) Record the above transactions in T accounts, and key entries with the numbers of the transactions. The following accounts will be needed to record the transactions for May:

Cash; Accounts Receivable; Supplies on Hand; Prepaid Insurance; Equipment, Truck; Notes Payable; Accounts Payable; Weinstein, Capital; Weinstein, Drawing; Service Fees; Rent Expense; Wages Expense; Utilities Expense; Truck Expense; Advertising Expense; Supplies Expense; and Insurance Expense.

(b) Prepare a trial balance of the general ledger as of May 31.

Answer 1

Solution

W. Weinstein

T – Accounts

	T-Accounts
Transaction. No.		Cash	Transaction
1	Capital	$25,000	3	Prepaid Insurance	$720
13	Accounts Receivable	$5,300	5	Truck	$2,500
			6	Rent Expense	$750
			7	truck Expense	$70
			9	Accounts Payable	$1,000
			10	Utilities Expense	$120
			12	Salaries and Wages Expense	$1,450
			14	Drawings	$800
	Total	$30,300		Total	$30,300
	Ending Balance	$22,890
Transaction no.		Accounts Receivable	Transaction no.
8	Service Revenue	$9,200	13	Cash	$5,300
	total	$9,200		Total	$9,200
	Ending balance	$3,900
Transaction No.		Supplies on Hand	Transaction No.
4	Accounts Payable	$580		Supplies Expense	$260
	total	$580		Total	$580
	Ending balance	$320
Transaction no.		Prepaid Insurance	Transaction no.
3	Cash	$720		Insurance Expense	$60
	total	$720		Total	$720
	Ending balance	$660
Transaction no.		Equipment	Transaction no.
	Accounts Payable	$2,400
		$2,400		Total	$2,400
	Ending balance	$2,400
Transaction no.		Truck	Transaction no.
5	Cash	$2,500
5	Notes Payable	$6,000
	Total	$8,500	Total	$8,500
	Ending balance	$8,500
Transaction no.		Notes Payable	Transaction no.
5			5	Truck	$6,000
Total	$6,000			Total	$6,000
				Ending balance	$6,000
Transaction		Accounts Payable	Transaction no.
9	Cash	$1,000	4	Supplies on Hand	$580
			2	Equipment	$2,400
	Total	2,980		Total	$2,980
				Ending balance	$1,980
Transaction no.		Weinstein Capital	Transaction no.
			1	Cash	$25,000
	Total	$25,000		Total	$25,000
				Ending balance	$25,000
Transaction no.		Weinstein Drawings	Transaction no.
14	Cash	$800
	Ending bal.	$800		Total	$800
Transaction no.		Service Fees	Transaction no
			8	Accounts Receivable	$9,200
	Total	$9,200		Total	$9,200
				Ending balance	$9,200
Transaction no.		Rent Expense	Transaction no.
6	cash	$750
	Total	$750		Total	$750
	Ending balance	$750
Transaction no.		Wages Expense	Transaction no.
12	Cash	$1,450
	Total	$1,450		Total	$1,450
	Ending balance	$1,450
Transaction no.		Utilities Expense	Transaction no.
10	Cash	$120
	Total	$120		Total	$120
	Ending balance	$120
Transaction no.		Advertising Expense	Transaction no.
11	Advertising Payable	$150
	Total	$150		Total	$150
	Ending balance	$150
Transaction no.		Supplies Expense
15	Supplies on Hand	$260
	Total	$260		Total	$260
	Ending balance	$260
Transaction no,		Insurance Expense	transaction no.
16	Prepaid Insurance	$60
	Total	$60		Total	$60
	Ending balance	$60

Trial Balance –

Trial Balance
for the month ended May 31
Account Titles	Debit	Credit
Cash	$22,890
Accounts Receivable	$3,900
Prepaid Insurance	$660
Supplies on Hand	$320
Equipment	$2,400
Truck	$8,500
Notes Payable		$6,000
Accounts Payable		$1,980
Advertising Payable		$150
Weinstein Capital		$25,000
Weinstein Drawings	$800
Service Revenue		$9,200
Rent Expense	$750
Wages Expense	$1,450
Utilities Expense	$120
Advertising expense	$150
Truck Expense	$70
supplies expense	$260
Insurance Expense	$60
Total	$42,330	$42,330