Accounting I   © 2008 Tibebe S. Mengistu

Assignments for Principles of Accounting I Chapter 2

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
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
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.