OBJECTIVES 3, 4 3-37 Journal, Ledger, and Trial Balance (Alternates are 3-39 through 3-44.) The balance sheet accounts of Detroit Machinery, Inc.. had the following balances on October 31, 20X0: Cash Accounts receivable Inventory Prepaid rent Accounts payable Paid-in capital Retained earnings $ 41,000 90,000 70.000 2,000 $203.000 $27.000 160.000 16,000 $203,000 Following is a summary of the transactions that occurred during November: a. Collections of accounts receivable. $75,000. b. Payments of accounts payable, $14.000. c. Acquisitions of inventory on open account. $80,000. d. Merchandise carried in inventory at a cost of $70,000 was sold on open account for $96,000. e. Recognition of rent expense for November. $1,000. f. Wages paid in cash for November. $8,000. g. Cash dividends declared and disbursed to stockholders on November 29, $10.000. Required 1. Prepare journal entries. 2. Enter beginning balances in T-accounts. Post the journal entries to T-accounts. Use the transaction letters to key your postings. 3. Prepare a trial balance for the month ending November 30, 20X0. 4. Explain why accounts payable increased by so much during November. 3-38 Financial Statements

Refer to problem 3-37. Prepare a balance sheet as of November 30, 20X0, and an income statement for the month of November. Prepare the retained earnings column of a statement of stockholders' equity. Prepare the income statement first. ASSIGNMENT MATERIAL 129 OBJECTIVES 4, 5