Question

Acquired $30,000 cash from the issue of common stock. Purchased inventory for $15,000 cash. Sold inventory costing $9,000 for $20,000 cash. Paid $1,500 for advertising expense. Required a. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits.

Answer 1

The answer is given below

Step-by-step explanation:

a. Cash Dr.$30,000

Common stock Cr.$30,000

Inventory Dr.$15,000

Cash Cr.$15,000

Cash Dr.$20,000

Sales Revenue Cr.$20,000

Cost of Goods Sold Dr.$9,000

Inventory Cr.$9,000

Advertising Expense Dr.$1,500

Cash Cr.$1,500

b. Cash

Dr. Cr.

Common Stock 30,000 Inventory 15,000

Sales 20,000 Advertising Exp 1,500

C/F 33,500

Common Stocks

Dr. Cr.

C/F 30,000 Cash 30,000

Inventory

Dr. Cr.

Cash 15,000 Cost of Goods Sold 9,000

C/F 6,000

Sales

Dr. Cr.

C/F 20,000 Cash 20,000

Cost of Goods Sold

Dr. Cr.

Inventory 9,000 C/F 9,000

Advertising Expense

Dr. Cr.

Cash 1,500 C/F 1,500

c. Trail Balance

Dr. Cr.

Cash 33,500

Common Stocks 30,000

Inventory 6,000

Sales 20,000

Cost of Goods sold 9,000

Advertising Expense 1,500

Total 50,000 50,000