Question

The following balances were taken from the general ledger of Pappas Company at Janaury 1, 2019: a. b. Cash 32,100 Accounts Receivable 22,500 Land 31,000 Building 75,000 Equipment 27,600 Inventory 125,000 Property Tax Payable 4,200 Notes Payable 28,000 Accounts Payable 14,200 Motgage Payable 46,000 Capital Stock 38,000 Retained Earnings 182,800 Durig 2019, Pappas Company completed the following transactions: Issued an additional 7,000 shares of capital stock for $8 per share on July 24, 2019. Paid dividend of $5,300 to shareholders on 8/1/2019. Borrowed an additional $20,000 from Huntington Bank on August 18, 2019. d. On September 29, 2019 Pappas Company made the quarterly mortgage payment of $4,000 principal and interest of $1,200. Purchased office supplies in the amount of $1,500 on 10/6/2019 on account. f. Paid off notes in the amount of $10,000 on October 9, 2019. g. Paid the utility bill of $520 on 10/30/2019. h. On November 11, 2019 Pappas Company sold inventory for $120,000 which cost $65,000. of total sales, 30% were cash sales. i. Accounts receivable were reduced by $4,300 from collection efforts on 11/28/2019. j. On December 2, 2019 Pappas paid the property taxes due in the amount of $7,600. k Advertising expenses in the amount of of $8,100 were paid on December 19, 2019. c. REQUIRED: Please prepare the asnwers to Items 1, 2 & 3 on lined paper and try and organize in an orderly manner. 1) Prepare Journal Entries for the 2019 transactions. 2) Set up T-accounts with the proper account balances at January 1, 2019 and post the journal entries to the T-accounts. Be sure to balance EVERY account for the ending balance. 3) Prepare the 12/31/2019 Trial Balance in good form for the Pappas Company.

Answer 1

1.

Credit Debit 56,000 56,000 5,300 5,300 20,000 20,000 4,000 1,200 5,200 1,500 1,500 10,000 10,000 Date Description Jul-24 Cash Capital stock Aug-01 Dividends Cash Aug-18 Cash Bank Loan Sep-29 Mortgage Payable Interest expense Cash Oct-06 Office Supplies Accounts Payable Oct-09 Notes payable Cash Oct-30 Utilities expense Cash Nov-11 Cash Accounts receivable Sales Revenue Nov-11 Cost of goods sold Inventory Nov-28 Bad Debt expense Accounts receivable Nov-02 Property taxes Property taxes payable Cash Dec-19 Advertising expense Cash 520 520 36,000 84,000 1,20,000 65,000 65,000 4,300 4,300 3,400 4,200 7600 8,100 8,100

2.

Mortgage Payable Debit Credit Sep-29 4,000 Opening 46,000 Cash Debit Credit Opening 32,100 Aug-01 5,300 Jul-24) 56,000 Sep-29 5,200 Aug-18 20,000 Oct-09 10,000 Nov-11 36,000 Oct-30 520 Nov-02 7,600 Dec-19 8,100 Bal 1,07,380 Bal 42,000 Accounts payable Debit Credit Opening 14,200 Oct-06 1,500 Bal 15,700 Capital stock Debit Credit Opening 38,000 Jul-24 56,000 Bal 94,000 Accounts receivable Debit Credit Opening 22,500 Nov-28 4,300 Nov-11 84,000 Bal 1,02,200 Sales Revenue Debit Credit Nov-11 1,20,000 Office Supplies Debit 1,500 Credit Bal 1,20,000 Oct-06 Bal 1,500 Interest expense Debit Sep-29 1,200 Credit Dividends Debit Aug-01 5,300 Credit Bal 1,200 Property taxes payable Bal 5,300

Bal 5,300 Property taxes payable Debit Credit Nov-02 4,200 Opening 4,200 Debit Bank Loan Credit Aug-18 20,000 Bal Bal 20,000 Cost of goods sold Debit 65,000 Credit Nov-11 Advertising expense Debit Credit Dec-19 8,100 Bal 65,000 Bal 8,100 Bad Debt expense Debit Credit 4,300 Nov-11 Opening Land 31,000 Bal 4,300 Bal 31,000 Building 75,000 Opening Equipment 27,600 Opening Bal 75,000 Bal 27,600 Inventory Debit Credit Opening 1,25,000 Nov-11 65,000 Notes Payable Debit Credit Oct-09 10,000 Opening 28,000 Bal 60,000 Bal 18,000

Utilities expense Debit 520 Credit Oct-30 Property Taxes Debit Nov-02 3,400 Credit Bal 520 Bal 3,400

3.

Credit 42,000 15,700 94,000 1,20,000 20,000 Trial balance Particulars Debit Cash 1,07,380 Mortgage Payable Accounts payable Accounts receivable 1,02,200 Capital stock Office Supplies 1,500 Sales Revenue Interest expense 1,200 Dividends 5,300 Bank Loan Property taxes payable Advertising expense 8,100 Cost of goods sold 65,000 Bad Debt expense 4,300 Land 31,000 Equipment 27,600 Building 75,000 Inventory 60,000 Utilities expense 520 Notes Payable Property Taxes 3,400 Retained Earnings Totals 4,92,500 18,000 1,82,800 4,92,500

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