Question

need help with part 1 & 2

1. Post and calculate trial balance for the following transactions for 'AAA Catering! Jan. 1 Stockholders invested $20,000 cash in the business in exchange of comm. stock 2 Paid $1,000 cash for store rent for the month of January 3 Purchased washers and dryers (laundry equipment) for $25,000 paying $10,000 in cash and signing a $15,000 note payable 4 Paid $1,200 cash for a one-year accident insurance policy 10 Declared and paid a cash dividend to stockholders $1,000 Date Explanation Post. Ref. Debit Credit Account Title: Cash Date Explanation Jan. Ref Debit Credit Balance

Answer 1

1.

Prepare journal entries as follows:

Date	Explanation	Post ref.	Debit	Credit
Jan.    1	Cash		20000
	Common stock			20000
2	Rent expense		1000
	Cash			1000
3	Laundry equipment		25000
	Cash			10000
	Note payable			15000
4	Prepaid insurance		1200
	Cash			1200
10	Dividends		1000
	Cash			1000

Prepare general ledger as follows:

Cash
Date	Explanation	Post ref.	Debit	Credit	Balance
Jan.1	Common stock		20000		20000
2	Rent expense			1000	19000
3	Laundry equipment			10000	9000
4	Prepaid insurance			1200	7800
10	Dividends			1000	6800
Laundry equipment
Date	Explanation	Post ref.	Debit	Credit	Balance
Jan. 3	Cash			10000	10000
	Note payable			15000	25000
Prepaid insurance
Date	Explanation	Post ref.	Debit	Credit	Balance
Jan. 4	Cash		1200		1200
Note payable
Date	Explanation	Post ref.	Debit	Credit	Balance
Jan. 3	Laundry equipment			15000	15000
Common stock
Date	Explanation	Post ref.	Debit	Credit	Balance
Jan. 1	Cash			20000	20000
Dividends
Date	Explanation	Post ref.	Debit	Credit	Balance
Jan. 10	Cash		1000		1000
Rent expense
Date	Explanation	Post ref.	Debit	Credit	Balance
Jan. 2	Cash		1000		1000

Prepare trial balance as follows:

AAA Catering
trial balance
Jan. 31, 2018
	Debit	Credit
Cash	6800
Laundry equipment	25000
Prepaid insurance	1200
Note payable		15000
Common stock		20000
Dividends	1000
Rent expense	1000
Total	35000	35000

2.

Prepare corrected trial balance as follows:

Elizabeth bakery
trial balance
Jan. 31, 2018
	Debit	Credit
Cash	33600
Prepaid insurance	4900
Accounts payable		7500
Unearned fees		5800
Common stock		20000
Dividends	4000
Service revenue		29200
Salaries expense	17000
Rent expense	3000
Total	62500	62500