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.
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