Question

Required Information [The folowing information applies to the questions displayed below] Colton Enterprises experienced the following events for Year 1 the first year of operation 1. Acquired $42.000 cash from the issue of common stock 2 Paid $12.700 cash in advance for rent. The payment was for the period April 1. Year 1 to March 31, Year 2 3. Performed services for customers on account for $96.000. 4. Incurred operating expenses on account of $39.500. 5. Conected $66.000 cash from accounts receivable. 6. Pald $28.000 cash for salary expense. 7. Pald $30,000 cash as a partial payment on accounts payable. Adjusting Entries 8. Made the adjusting entry for the expired rent. (See Event 2) 9. Recorded $3.900 of accrued salaries at the end of Year 1. Events for Year 2 1. Pald $3,800 cash for the salaries accrued at the end of the prior accounting period 2 Performed services for cash of $35,000. 3. Purchased $3.500 of suppiles on account 4. Paid $12600 cash in advance for rent. The payment was for one year beginning Apr 1, Year 2 5. Performed services for customers on account for $102,000. 6. Incurred operating expenses on account of $48.500. 7. Collected $96.000 cash from accounts receivable 8. Pald $46,000 cash as a partial payment on accounts payable 9. Pald 532 200 cash for salary expense. 10. Pald a $10,000 cash dividend to stockholders. Adjusting Entries 11. Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid In Year 1) 12. Recorded supplies expense. A physical count showed that $800 of supples were still on hand C. Prepare a trial balance for Year 1 COLTON ENTERPRISES Trial Balance December 31, Year 1 Account Title Debit Credit Totals

Answer 1

c) Trial balance

Account titles	Debit	Credit
Cash	36500
Account receivable	20000
Prepaid rent (12700*3/12)	3175
Account payable		7700
Salary payable		3800
Common Stock		42000
Service revenue		86000
Rent expense (12700*9/12)	9525
Operating expense	38500
Salary expense	31800
Total	139500	139500