Q1DC_3
Question
Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners. Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of \(6,000. The business completed the following transactions during June:
a. McChesney deposited \)10,000 cash in a business bank account to start the company. The company issued common stock to McChesney.
b. Paid \(300 cash for office supplies.
c. Incurred advertising expense on account, \)700.
d. Paid the following cash expenses: administrative assistant’s salary, \(1,400; office rent, \)1,000.
e. Earned service revenue on account, \(8,800.
f. Collected cash from customers on account, \)1,200.
Requirements
3. Prepare a trial balance at June 30, 2018
Step-by-Step Solution
VerifiedAdvertising expenses are the cost of promoting the brands and the required trial balance is prepared.
Advertising expenses are defined as the cost incurred by the company on promoting and adverting the company or any product.
Dean McChesney | ||
Trial Balance | ||
June 30, 2018 | ||
Accounts Title | Debit ($) | Credit ($) |
|
|
|
Cash | $8,500 |
|
Accounts Receivables | $7,600 |
|
Office Supplies | $300 |
|
Accounts Payable |
| $700 |
Common Stock |
| $10,000 |
Service Revenue |
| $8,800 |
Salaries Expense | $1,400 |
|
Rent Expense | $1,000 |
|
Advertising Expense | $700 |
|
|
|
|
TOTAL | $19,500 | $19,500 |