(b) Prepare the trial balance after the effects of the above transactions were recorded. List the accounts involved in alphabetical order.
Question
(b) Prepare the trial balance after the effects of the above transactions were recorded. List the accounts involved in alphabetical order.
Solution
To prepare the trial balance, we list all the accounts and their final balances after the transactions. The accounts are listed in alphabetical order as requested:
| Account name | Debit ($) | Credit ($) |
|---|---|---|
| Accounts payable | 42,700 | |
| Cash | 231,100 | |
| Inventory | 58,000 | |
| Loan payable | 143,800 | |
| Machinery | 220,200 | |
| Service Revenue | 50,200 | |
| Share capital | 293,800 | |
| Wages Expense | 21,200 |
Now, we need to ensure that the total of the debit balances equals the total of the credit balances. This is a fundamental principle of double-entry bookkeeping, which ensures that the accounts are balanced.
Total Debits = 231,100 (Cash) + 58,000 (Inventory) + 220,200 (Machinery) + 21,200 (Wages Expense) = 530,500
Total Credits = 42,700 (Accounts payable) + 143,800 (Loan payable) + 50,200 (Service Revenue) + 293,800 (Share capital) = 530,500
As the total debits equal the total credits, the trial balance is balanced.
Similar Questions
Which report is constructed immediately prior to preparing the financial statements with the purpose of demonstrating that the accounts balance?Multiple choice question.Post-closing trial balanceClosing entriesAdjusted trial balanceUnadjusted trial balance
The following are steps in the accounting cycle. Of the following, which would be prepared last?Group of answer choicesAn adjusted trial balance is prepared.Transactions are posted to the ledger.An unadjusted trial balance is prepared.Adjusting entries are journalized and posted to the ledger.
Which steps in the Financial Accounting Process are in the correct sequence?Select one:a.record the transaction, prepare the unadjusted trial balance, record adjusting journal entries, record closing entries, prepare financial statementsb.record the transaction, post to the ledger, prepare the adjusted trial balance, enter adjusting entries, prepare financial statementsc.record the transaction, post to the ledger, prepare the adjusted trial balance, prepare financial statements, record closing entriesd.record the transaction, post to the ledger, record adjusting entries, prepare the unadjusted trial balance, prepare financial statements
Which of the following statements correctly explains how to prepare a trial balance? (Check all that apply.)Multiple select question.Verify that the total debit balances equals the total credit balances.Compute the total of debit balances and the total of credit balances.List each account title and its amount from the ledger.Total debit account balances do not have to equal total credit account balances in order for the financial statements to be prepared.
(b) Record the effects of the above transactions in the ledger accounts.
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