Question

Min invested $18,000 cash in the business. Paid $7,540 cash for monthly rent expense for May. Paid $4,600 cash for this year’s insurance premium beginning immediately. Purchased office supplies for $890 cash. Purchased $12,900 of office equipment on credit (with accounts payable). Received $36,000 cash for engineering services provided in May. Min withdrew $3,370 cash for personal use. Required 1. Prepare a trial balance for this business as of the end of May 2.

Answer 1

`\left[\begin{array}{ccc}$Account&$DEBIT&$CREDIT\\$Cash&37,600&-\\$Prepaid insurance&4,600&\\$Office supplies&890&-\\$office equipment&12,900&\\$accouts payable&-&12,900\\$Capital Account&&18,000\\$drawins&3,370&\\$Sales revenue&&36,000\\$Rent expense&7,540&\\$Total&66,900&66,900\\\end{array}\right]`

Step-by-step explanation:

We must do ledger for each accounts, most of them only got one transaction so we just post them directly.

For cash we must do it as there are several transaction:

CASH

DEBIT CREDIT

18,000

(7,540)

(4,600)

(890)

36,000

(3,370)

37,600

Assets and expenses goes into debit column

Liabilities, equity and revenues into credit column