23E - Horngren'S Financial And Managerial Accounting

Question

Question: Preparing a trial balance from T-accounts 

The T-accounts of McMahon Farm Equipment Repair follow as of May 31, 2018.

ASSETS Salaries Payable LIABILITIES EQUITY Retained Earnings 4,000 29,000 Notes Payable 3,500 400 Accounts Receivable 14,000 Land 29,000 Building 16,000 Equipment Common Stock Contributed Capital Dividends Property Tax Expense 1,000 Advertising Expense 280

Cash 31,000 1,800 400 14,000 4,200 800 4,000 2,000 3,380

Service Revenue 3,500 1,800 4,200 31,000 2

Step-by-Step Solution

Answer

The total forthe debit side and credit side is $80,700

Step-by-Step Solution Step 1: Computation of Cash Balance

$$\begin{gathered} \mathbf{CashBalance}\mathbf{=}\mathbf{Debits}\mathbf{-}\mathbf{Credits} \\ \mathbf{=}\mathbf{\$}\mathbf{31}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{800}\mathbf{+}\mathbf{\$}\mathbf{400}\mathbf{-}\mathbf{\$}\mathbf{14}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{800}\mathbf{-}\mathbf{\$}\mathbf{4}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{2}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{380} \\ \mathbf{=}\mathbf{\$}\mathbf{9}\mathbf{,}\mathbf{020} \end{gathered}$$

Step 2: Preparation of Trial Balance

McMahon Farm Equipment Repair
Trial Balance
May 31, 2018
Account title	Debit ($)	Credit ($)
Cash	$9,020
Accounts Receivables	$3,100
Land	$14,000
Building	$29,000
Equipment	$16,000
Salaries Payable		$3,400
Notes Payable		$25,000
Common Stock		$47,000
Dividends	$2,000
Service Revenue		$5,300
Salaries Expense	$6,300
Property Tax Expense	$1,000
Advertising Expense	$280
Total	$80,700	$80,700