The balance sheet accounts of detroit machinery, Inc. had the following balances in October 31, 20X0:

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 in November 30, 20X0.

4) Explain why accounts payable increased by so much during November.

Cash Accounts receivable Inventory Prepaid rent Accounts payable Paidin capital Retained earnings 41.000 90,000 70,000 2.000 27,000 160.000 16,000 S203.000 $203.000