Question

Yi Min started an engineering firm called Min Engineering. He began

operations and completed seven transactions in May, which included his initial investment of $19,500 cash. After those seven transactions, the ledger included the following accounts with normal balances.
Cash$46,789
Office supplies 940
Prepaid insurance 4,100
Office equipment 13,500
Accounts payable 13,500
Common stock 19,500
Dividends 3,191
Engineering fees earned 43,000
Rent expense 7,480
The following seven transactions produced the account balances shown above.
A. Y. Min invested $19,500 cash in the business in exchange for common stock.
B. Paid $7,480 cash for monthly rent expense for May.
C. Paid $4,100 cash in advance the annual for insurance premium beginning the next period.
D. Purchased office supplies for $940 cash.
E. Purchased $13,500 of office equipment on credit (with accounts payable).
F. Received $43,000 cash for engineering services provided in May.
G. The company paid $3,191 cash in dividends.

Answer 1

Question Completion:

Prepare a trial balance for the month of May and a Cash T-account, showing the cash balance.

Answer:

Yi Min

1. Trial Balance as of May 31,

Account Details Debit Credit

Cash $46,789

Office supplies 940

Prepaid insurance 4,100

Office equipment 13,500

Accounts payable $13,500

Common stock 19,500

Dividends 3,191

Engineering fees earned 43,000

Rent expense 7,480

Totals $76,000 $76,000

2. Cash Accounts

Account Details Debit Credit

Common stock $19,500

Rent $7,480

Prepaid Insurance 4,100

Office supplies 940

Engineering fees 43,000

Dividends 3,191

Balance $46,789

Totals $62,500 $62,500

Step-by-step explanation:

a) Data and Calculations:

Cash$46,789

Office supplies 940

Prepaid insurance 4,100

Office equipment 13,500

Accounts payable 13,500

Common stock 19,500

Dividends 3,191

Engineering fees earned 43,000

Rent expense 7,480

b) Yi Min's trial balance lists all the general ledger accounts (both revenue and capital) of a business at the end of May. This list is made up of the Account Titles of each nominal ledger account and the value of that ledger balance as either a debit balance or a credit balance. The two sides are expected to be in agreement, otherwise, an error in posting could have occurred.

c) The Cash account is the general ledger where all cash transactions are posted and summarized in order to determine the balance at the end of the period. It records the cash receipts and the cash payments.