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Transaction Analysis and Trial Balance BC Back-Country Airlines, Inc., operates leased amphibious aircraft and docking facilities, equipping the firm to transport campers and hunters from

Transaction Analysis and Trial Balance

BC Back-Country Airlines, Inc., operates leased amphibious aircraft and docking facilities, equipping the firm to transport campers and hunters from British Columbia, Canada, to outpost camps owned by various resorts. On August 1, the firm's trial balance was as follows:

BC BACK-COUNTRY AIRLINES, INC. Unadjusted Trial Balance August 1, 2016
Debit Credit
Cash $83,400
Accounts Receivable 24,000
Accounts Payable $2,500
Notes Payable 3,800
Common Stock 80,000
Retained Earnings 21,100
Totals $107,400 $107,400

During August, the following transactions occurred:

Aug 1 Paid August rental cost for aircraft, dockage, and dockside office, $6,800.
2 Paid the insurance premium for August, $3,600.
3 Paid for August advertising in various sports magazines, $2,300.
4 Rendered fly-in services for various groups for cash, $17,550.
5 Billed the Canadian Ministry of Natural Resources for services in transporting mapping personnel, $4,700.
6 Received $21,200 on account from clients.
7 Paid $2,500 on accounts payable.
8 Billed various clients for services, $20,200.
9 Paid interest on an outstanding note payable for August, $155.
10 Paid August wages, $15,600.
11 Received invoice for the cost of fuel used during August, $4,400.
12 Paid a cash dividend, $5,300 (debit Retained Earnings).

Required

a. Set up accounts for each item in the August 1 trial balance and enter the beginning balances. Also provide similar accounts for the following items: Service Fees Earned, Wage Expense, Advertising Expense, Rent Expense, Fuel Expense, Insurance Expense and Interest Expense. Create journal entries and record the transactions for August in the appropriate T-accounts, using the dates given.

General Journal
Date Decription Debit Credit
(1) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record payment of rent expense.
(2) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record payment of insurance premium.
(3) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record payment of advertising expense.
(4) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record service fees earned.
(5) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record service fees earned.
(6) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record collections from customers.
(7) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record payments on accounts payable.
(8) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record service fees earned.
(9) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record payment of interest.
(10) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record payment of wage expense.
(11) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record invoice for fuel used in month.
(12) AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseCashCommon StockFuel ExpenseInsurance ExpenseInterest ExpenseNotes PayableRent ExpenseRetained EarningsService Fees EarnedWage Expense Answer Answer
To record payment of dividends.

Cash
Beg Answer Answer
(1) Answer Answer
(2) Answer Answer
(3) Answer Answer
(4) Answer Answer
(6) Answer Answer
(7) Answer Answer
(9) Answer Answer
(10) Answer Answer
(12) Answer Answer
Bal Answer Answer
Accounts Receivable
Beg Answer Answer
(5) Answer Answer
(6) Answer Answer
(8) Answer Answer
Bal Answer Answer
Notes Payable
Beg Answer Answer
Bal Answer Answer
Accounts Payable
Beg Answer Answer
(7) Answer Answer
(11) Answer Answer
Bal Answer Answer
Common Stock
Beg Answer Answer
Bal Answer Answer

Retained Earnings
Beg Answer Answer
(12) Answer Answer
Bal Answer Answer
Interest Expense
(9) Answer Answer
Bal Answer Answer
Service Fees Earned
(4) Answer Answer
(5) Answer Answer
(8) Answer Answer
Bal Answer Answer
Rent Expense
(1) Answer Answer
Bal Answer Answer

Wage Expense
(10) Answer Answer
Bal Answer Answer
Insurance Expense
(2) Answer Answer
Bal Answer Answer
Advertising Expense
(3) Answer Answer
Bal Answer Answer
Fuel Expense
(11) Answer Answer
Bal Answer Answer

b. Prepare a trial balance as of August 31, 2016.

BC BACK-COUNTRY AIRLINES, INC. Trial Balance August 31,2016
Debit Credit
Cash $Answer $Answer
Accounts Receivable Answer Answer
Accounts Payable Answer Answer
Notes Payable Answer Answer
Common Stock Answer Answer
Retained Earnings Answer Answer
Service Fees Earned Answer Answer
Wage Expense Answer Answer
Advertising Expense Answer Answer
Rent Expense Answer Answer
Fuel Expense Answer Answer
Insurance Expense Answer Answer
Interest Expense Answer Answer
Totals $Answer $Answer

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