Challenge Exercise 2

The accounts in the ledger of Sun Delivery Service contain the following balances on July 31, 2014.

Accounts Receivable $ 8,000

Prepaid Insurance $ 2,000

Accounts Payable $7,900

Retained Earnings $5,000

Cash $?

Service Revenue $11,000

Common Stock $42,000

Salaries and Wages Expense $? ($6000)

Dividends $900

Salaries and Wages Payable $1,000

Equipment $50,000

Supplies $3,000

Gasoline and Oil Expense $800

Unearned Service Revenue $2,500

Insurance Expense $600

Maintenance and Repair Expense $1,100

Notes Payable $19,000

Instructions:

Prepare a trial balance with the accounts arranged as illustrated in the chapter and fill in the missing amounts for Cash and Salaries Expenses. Assume net income for the period is $3,500