Question
Applying the Entire Accounting Cycle The post-closing trial balance for Wilson Corp., a retailer, at December 31, 2019, follows. Acc. No. Description Debit Credit 101
Applying the Entire Accounting Cycle
The post-closing trial balance for Wilson Corp., a retailer, at December 31, 2019, follows.
Acc. No. | Description | Debit | Credit |
---|---|---|---|
101 | Cash | 27,000 | 0 |
102 | Accounts receivable | 21,000 | |
103 | Allowance for doubtful accounts | 1,000 | |
104 | Inventory (perpetual inventory system) | 35,000 | |
105 | Prepaid insurance (20 months remaining) | 900 | |
200 | Equipment (20-year estimated life, no residual value) | 50,000 | |
201 | Accumulated depreciationequipment | 22,500 | |
300 | Accounts payable | 7,500 | |
301 | Salaries payable | ||
302 | Income taxes payable (for 2019) | 4,000 | |
400 | Common stock, par $1 | 80,000 | |
401 | Retained earnings | 18,900 | |
500 | Sales | ||
600 | Cost of goods sold | ||
601 | Operating expenses | ||
602 | Income tax expense | ||
700 | Income summary | ||
Total | $133,900 | $133,900 |
The following transactions occurred during 2020 in the order shown (use the number at the left in place of a date). 1. Sales revenue was $30,000, of which $10,000 was on credit; the cost, provided using perpetual inventory, was $19,500. 2. Collected $17,000 cash on accounts receivable. 3. Paid $4,000 cash toward income taxes payable (2019). 4. Purchased $40,000 of merchandise, of which $8,000 was on credit. 5. Paid $6,000 cash toward accounts payable. 6. Sales revenue was $72,000 (in cash); cost was $46,800. 7. Paid $19,000 cash in operating expenses. 8. On July 1, 2020, issued 1,000 shares of common stock, par $1, for $1,000 cash. 9. Purchased $100,000 of merchandise, of which $27,000 was on credit. 10. Sales revenue was $98,000, of which $30,000 was on credit; cost, $63,700. 11. Collected $26,000 cash toward accounts receivable. 12. Paid $28,000 cash toward accounts payable. 13. Paid $18,000 cash for various operating expenses.
b. Set up T-accounts as the general ledger for each of the accounts listed in the above trial balance and enter the December 31, 2019, balances. Post the journal entries from part a. Note: Enter amounts in the order that they are presented above (1 through 13), using the first available answer field on the appropriate side of the T-account. Not all answer fields will be used. Do not enter reference numbers. Cash 101 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Accounts Receivable 102 104 Prepaid Insurance 105 200 Allowance for Doubtful Accounts Inventory 0 Equipment 0 0 0 103 0 0 0 Accumulated Depreciation- Equipment 0 0 201 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 300 302 Common Stock 400 401 Accounts Payable 0 Income Taxes Payable 0 0 Retained Earnings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sales 500 Cost of Goods Sold 600 601 Operating Expense 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Step by Step Solution
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