Question

Halogen Laminated Products Company began business on January 1, 2018. During January, the following transactions occurred:

Jan.		1		Issued common stock in exchange for $100,000 cash.
		2		Purchased inventory on account for $35,000 (the perpetual inventory system is used).
		4		Paid an insurance company $2,400 for a one-year insurance policy.
		10		Sold merchandise on account for $12,000. The cost of the merchandise was $7,000.
		15		Borrowed $30,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months.
		20		Paid employees $6,000 salaries and wages for the first half of the month.
		22		Sold merchandise for $10,000 cash. The cost of the merchandise was $6,000.
		24		Paid $15,000 to suppliers for the merchandise purchased on January 2.
		26		Collected $6,000 on account from customers.
		28		Paid $1,000 to the local utility company for January gas and electricity.
		30		Paid $4,000 rent for the building. $2,000 was for January rent, and $2,000 for February rent.

Required:
1. Prepare general journal entries to record each transaction.
2. Post the transactions into the appropriate T-accounts.
3. Prepare an unadjusted trial balance as of January 30, 2018.

Answer 1

Requirement 1:

Date	Account title and Explanation	Debit	Credit
Jan.1	Cash	$100,000
	Common stock		$100,000
	[To record issuance of common stock]
Jan.2	Inventory	$35,000
	Accounts payable		$35,000
	[To record purchase of inventory on account]
Jan.4	Prepaid insurance	$2,400
	Cash		$2,400
	[To record cash paid in advance for insurance]
Jan.10	Accounts receivable	$12,000
	Sales revenue		$12,000
	[To record sales on account]
	Cost of goods sold	$7,000
	Inventory		$7,000
	[To record cost of goods sold]
Jan.15	Cash	$30,000
	Notes payable		$30,000
	[To record borrowed from bank]
Jan.20	Salaries and wages expense	$6,000
	Cash		$6,000
	[To record payment of salaries and wages]
Jan.22	Cash	$10,000
	Sales revenue		$10,000
	[To record sales on account]
	Cost of goods sold	$6,000
	Inventory		$6,000
	[To record cost of goods sold]
Jan.24	Accounts payable	$15,000
	Cash		$15,000
	[To record cash paid for accounts payable]
Jan.26	Cash	$6,000
	Accounts receivable		$6,000
	[To record cash collected from customers]
Jan.28	Utilities expense	$1,000
	Cash		$1,000
	[To record payment of utilities]
Jan.30	Rent expense	$2,000
	Prepaid rent	$2,000
	Cash		$4,000
	[To record payment of rent]

Requirement 2:

Cash				Common stock
Jan.1	$100,000	Jan.4	$2,400			Jan.1	$100,000
Jan.15	$30,000	Jan.20	$6,000			Bal.	$100,000
Jan.22	$10,000	Jan.24	$15,000
Jan.26	$6,000	Jan.28	$1,000	Accounts payable
		Jan.30	$4,000	Jan.24	$15,000	Jan.2	$35,000
Bal.	$117,600					Bal.	$20,000
Inventory				Notes payable
Jan.2	$35,000	Jan.10	$7,000			Jan.15	$30,000
		Jan.22	$6,000			Bal.	$30,000
Bal.	$22,000
				Service revenue
Prepaid insurance						Jan.10	$12,000
Jan.4	$2,400					Jan.22	$10,000
Bal.	$2,400					Bal.	$22,000
Prepaid rent				Cost of goods sold
Jan.30	$2,000			Jan.10	$7,000
Bal.	$2,000			Jan.22	$6,000
				Bal.	$13,000
Accounts receivable
Jan.10	$12,000	Jan.26	$6,000	Salaries and wages expense
Bal.	$6,000			Jan.20	$6,000
				Bal.	$6,000
				Utilities expense
				Jan.28	$1,000
				Bal.	$1,000
				Rent Expense
				Jan.30	$2,000
				Bal.	$2,000

Requirement 3:

Halogen Laminted Products
Unadjusted Trial Balance
For the month ended January 30,2018
Account title	Debit	Credit
Cash	$117,600
Inventory	$22,000
Prepaid insurance	$2,400
Prepaid rent	$2,000
Accounts receivable	$6,000
Common stock		$100,000
Accounts payable		$20,000
Notes payable		$30,000
Service revenue		$22,000
Cost of goods sold	$13,000
Salaries and wages payable	$6,000
Utilities expense	$1,000
Rent expense	$2,000
Total	$172,000	$172,000