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Unformatted text preview: er had run out of ink on the very last page. She is frustrated because she is not able to determine the company’s exact profitability to date, and is on her way to a shareholder meeting where she is to issue a report on the company’s progress. She happened to note that you were studying an accounting book, and asked if you might help her. Prepare a trial balance from the general ledger, determine the missing amount for salaries expense, and determine the company’s profit for its first month. CASH Date Description 02-Jan-08 Balance forward 03-Jan-08 Debit Credit Balance - - - Journal Page 1 750,000 - 750,000 10-Jan-08 Journal Page 1 - 225,000 525,000 14-Jan-08 Journal Page 1 - 45,000 480,000 18-Jan-08 Journal Page 2 120,000 - 600,000 21-Jan-08 Journal Page 2 - 12,000 588,000 26-Jan-08 Journal Page 2 - 9,000 579,000 31-Jan-08 Journal Page 2 78,000 - 657,000 ACCOUNTS RECEIVABLE Date Description Debit Credit Balance 02-Jan-08 Balance forward - - - 06-Jan-08 Journal Page 1 165,000 - 165,000 18-Jan-08 Journal Page 2 - 120,000 45,000 LAND Date Description 02-Jan-08 10-Jan-08 Debit Balance forward Journal Page 1 Credit Balance - - - 225,000 - 225,000 SALARIES PAYABLE Date Description Debit Credit Balance 02-Jan-08 Balance forward - - - 31-Jan-08 Journal Page 2 - 54,000 54,000 Download free eBooks at bookboon.com 16 Accounting Cycle Exercises II Problem 3: Worksheet CAPITAL STOCK Date Description Debit Credit Balance 02-Jan-08 Balance forward - - - 03-Jan-08 Journal Page 1 - 750,000 750,000 REVENUES Date Description Debit Credit 02-Jan-08 Balance - - - 06-Jan-08 Journal Page 1 - 165,000 165,000 31-Jan-08 Journal Page 2 - 78,000 243,000 SUPPLIES EXPENSE Date Description Debit Credit 02-Jan-08 26-Jan-08 Balance - - - 9,000 Journal Page 2 - 9,000 UTILITIES EXPENSE Date Description Debit Credit 02-Jan-08 21-Jan-08 Balance - - - 12,000 Journal Page 2 - 12,000 SALARIES EXPENSE Date Description Debit Credit 02-Jan-08 - 14-Jan-08 Journal Page 1 31-Jan-08 Balance - - Journal Page 2 45,000 Worksheet 3 Debits Cash $ 657,000 $ 657,000 Credits Accounts receivable Land Salaries payable Capital stock Revenues Supplies expense Utilities expense Salaries expense $ - Download free eBooks at bookboon.com 17 Accounting Cycle Exercises II Problem 3: Solution Solution 3 Debits Cash $ Accounts receivable Credits 657,000 45,000 Land 225,000 Salaries payable $ 54,000 Capital stock 750,000 Revenues 243,000 Supplies expense 9,000 Utilities expense 12,000 Salaries expense 99,000 $ 1,047,000 $ 1,047,000 The total salaries expense is $99,000 – the amount necessary to bring the trial balance into balance. TrueTarget was profitable, because revenues ($243,000) exceeded expenses ($9,000 + $12,000 + $99,000 = $40,000). Please click the advert Free online Magazines Click here to download SpeakMagazines.com Download free eBooks at bookboon.com 18 Accounting Cycle Exercises II Problem 4: Worksheet Problem 4 The following narratives describe transactions impacting cash, accounts receivable, accounts...
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This document was uploaded on 09/24/2013.

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