Question

Following are the transactions of a new company called Pose-for-Pics

Aug.
1 Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company in exchange for como stock.
2 The company paid $2,100 cash for an insurance policy covering the next 24 months
5 The company purchased office supplies for $880 cash
20 The company received $3,331 cash in photography Tees earned.
31 The company paid $675 cash for August utilities.
Required:
1. Post the transactions to the T-accounts.
2 Use the amounts from the T-accounts in Requirement to prepare an August 31 trial balance for Pose for Pics.

Answer 1

Pose-for-Pics

1. T-accounts:

Cash

Date Accounts Titles Debit Credit

Aug. 1 Common stock $6,500

Aug. 2 Prepaid Insurance $2,100

Aug. 5 Office supplies 880

Aug. 20 Photography Fees 3,331

Aug. 31 Utilities 675

Aug. 31 Balance $6,176

Common Stock

Date Accounts Titles Debit Credit

Aug. 1 Cash $6,500

Aug. 1 Photography Equipment 33,500

Aug. 31 Balance $40,000

Photography Equipment

Date Accounts Titles Debit Credit

Aug. 1 Common stock $33,500

Prepaid Insurance

Date Accounts Titles Debit Credit

Aug. 2 Cash $2,100

Office Supplies

Date Accounts Titles Debit Credit

Aug. 4 Cash $880

Photography Fees

Date Accounts Titles Debit Credit

Aug. 20 Cash $3,331

Utilities

Date Accounts Titles Debit Credit

Aug. 31 Cash $675

2. Pose-for-Pics

Trial Balance

As of August 31:

Accounts Titles Debit Credit

Cash $6,176

Common stock $40,000

Equipment 33,500

Prepaid Insurance 2,100

Office supplies 880

Photography Fees 3,331

Utilities expense 675

Totals $43,331 $43,331

Step-by-step explanation:

T-accounts are the general ledger accounts where the transactions of Pose-for-Pics are summarized. From the T-accounts, the Trial Balance can be prepared to show the list of account balances from the general ledger. The Trial Balance forms the first basis for the preparation of financial statements after adjustments have been made for accruals, prepayments, deferred revenue, and depreciation expenses. The Trial Balance may also show that the accounts have been correctly posted with corresponding debit and credit entries.