The trial balance of Kirk Used Auto Company, on March 31, 20X8, follows:
Account Title
Debit
Credit
Cash
$10,000
Accounts Receivable
20,000
Automobile Inventory
100,000
Accounts Payable
$3,000
Notes Payable
70,000
Kirk, owner's equity
57,000
Total
$130,000
$130,000
This business is a sole proprietorship, thus the equity account used here is Kirk, Owner's Equity.
In practice, it is often
called Kirk, Capital.
Kirk rented operating space and equipment on a month-to month basis. During April, the business had
the following summarized
transactions:
a.
Invested additional $20,000 cash in the business.
b.
Collected $10,000 on accounts receivable.
c.
Paid $2,000 on accounts payable.
d.
Sold autos for $120,000 cash.
e.
Cost of autos sold was $70,000
f.
Replenished inventory for $60,000 cash
g.
Paid rent expense in cash, $14,000
h.
Paid utilities in cash, $1,000
i.
Paid selling expense in cash, $30,000
j.
Paid interest expense in cash, $1,000
Journalize transactions a to j above and post the entries to the ledger.
2.
Open T-accounts for the accounts in the trial balance and the following to it: sales, cost of goods
sold,
rent expense, utilities expense, selling expense, and interest expense. Enter the March 31st
balances in the appropriate
accounts.
3.
Prepare the trial balance as of April 30, 20X8.
4.
Prepare an income statement for April. Ignore income taxes.
5.
Provide the closing entries.
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