Question

Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to expand by opening a retail sales shop. They have decided to form the business as a corporation called Traveling Gourmet, Inc. The following transactions occurred in March: Received $83,000 cash from each of the two shareholders to form the corporation, in addition to $2,300 in accounts receivable, $5,900 in equipment, a van (equipment) appraised at a fair value of $13,600, and $1,350 in supplies. Gave the two owners each 560 shares of common stock with a par value of $1 per share. Purchased a vacant store for sale in a good location for $390,000, making a $78,000 cash down payment and signing a 10-year mortgage from a local bank for the rest. Borrowed $53,000 from the local bank on a 10 percent, one-year note. Purchased and used food and paper supplies costing $11,430 in March; paid cash. Catered four parties in March for $4,500; $1,660 was billed, and the rest was received in cash. Made and sold food at the retail store for $12,050 cash. Received a $450 telephone bill for March to be paid in April. Paid $393 in gas for the van in March. Paid $6,880 in wages to employees who worked in March. Paid a $330 dividend from the corporation to each owner. Purchased $53,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $21,500 (added to the cost of the building); paid cash.

Record in the T-accounts the effects of each transaction for Traveling Gourmet, Inc., in March. Compute ending balances

Cash Accounts Receivable Beg. Bal. Beg. Bal. (b) (d) (h) (0) (a) (a) (с) (е) (e) (1) End. Bal. 0 (i) (k) End. Bal. 0 Supplies Equipment Beg. Bal (a) Beg. Bal (a) (k) End. Bal End. Bal 0 0 Accounts Payable Building Beg. Bal Beg. Bal. (b) (g) (k) End. Bal End. Bal 0 0 Note Payable Mortgage Payable Beg. Bal Beg. Bal (c) (b) End. Bal End. Bal 0 0 Additional Paid-in Capital Common Stock Beg. Bal Beg. Bal. (a) (a)

Answer 1

Post the entries to T-accounts as follows:

Beg. Bal (b) Accounts payable SO Beg. Bal $450 (9) Cash SO $166,000 $53,000 $2.840 $12,050 (d) $78.000 $11.430 $393 $6,880 $660 $74,500 End. Bal $62.027 $450 End. Bal Accounts receivable Notes payable $0 $53,000 Beg. Bal (a) Beg. Bal SO $2,300 $1,660 $3.960 $53.000 End. Bal Beg. Bal Supplies SO $1,350 $1,3501 Mortgage payable SO Beg. Bal $312.000 (b) $312.000 End. Bal Beg. Bal (a) (k) End. Bal Equipment $0 $19.500 $53,000 $72,500 Common stock $0 $1,120 Beg. Bal (a) HHHHHHHHH $1.120 End. Bal Beg. Bal Building SO $390.000 $21.500 $411,500 Additional Paid-in Capital SO Beg. Bal $188,030 (a) End. Bal $188.030 End. Bal Supplies expense SO $11,430 Retained earnings $660 $0 Beg. Bal Beg. Bal End Bal End. Bal $660 Utilities expense Beg. Bal SO $450 $450 Food sales revenue $0 Beg. Bal $12,050 (1) $12,050 End. Bal End. Bal Wages expense Beg. Bal SO Catering sales revenue $0 Beg. Bal $4,500 (2) $4,500 End. Bal $6.880 $6.880 End. Bal Fuel expense Beg. Bal SO $393 $393 End Bal

Prepare the following trial balance to check for arithmetical accuracy .

TG Inc
Trial Balance
March 31, 2019
Account Title	Debit	Credit
Cash	$62,027
Accounts receivable	$3,960
Supplies	$1,350
Equipment	$72,500
Building	$411,500
Accounts payable		$450
Notes payable		$53,000
Mortgage payable		$312,000
Common stock		$1,120
Additional paid-in capital		$188,030
Retained earnings	$660
Food sales revenue		$12,050
Catering sales revenue		$4,500
Supplies expense	$11,430
Utilities expense	$450
Wage expense	$6,880
Fuel expense	$393
Total	$571,150	$571,150