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b. Prepare a before-closing trial balance. MARY'S DESIGNS Before-Closing Trial Balance December 31, Year 1 Account Titles Debit Credit

b. Prepare a before-closing trial balance. MARY'S DESIGNS Before-Closing Trial Balance December 31, Year 1 Account Titles Debit Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following accounting events apply to Mary’s Designs for Year 1: ### Asset Source Transactions 1. **Issued Common Stock**: Acquired $16,000 in cash by issuing common stock. 2. **Service Revenue**: Performed services and collected $900 in cash. 3. **Unearned Revenue**: Collected $4,900 in advance for services to be provided over the next 12 months. 4. **Accounts Receivable**: Provided $12,200 of services on account. 5. **Supply Purchase**: Purchased $470 of supplies on account. ### Asset Exchange Transactions 6. **Land Purchase**: Bought land for $4,200 in cash. 7. **Cash Collection**: Collected $7,100 from accounts receivable. 8. **Supply Purchase**: Purchased $420 of supplies with cash. 9. **Prepaid Rent**: Paid $3,700 for one year’s rent in advance. ### Asset Use Transactions 10. **Salary Payment**: Paid $2,800 in cash for employee salaries. 11. **Dividends**: Paid a $1,900 cash dividend to stockholders. 12. **Accounts Payable**: Settled $470 of accounts payable with cash. ### Claims Exchange Transactions 13. **Advertisement Expense**: Placed a $150 advertisement in a local newspaper on account. 14. **Utility Expense**: Incurred a $115 utility expense on account. ### Adjusting Entries 15. **Revenue Recognition**: Recognized $3,675 of revenue for services performed; cash was collected earlier (as noted in Event 3). 16. **Accrued Salaries**: Recorded $1,480 of accrued salaries at the end of Year 1. 17. **Supplies Expense**: Recognized the cost of supplies used; $90 of supplies were on hand at the accounting period's end. 18. **Prepaid Rent**: Recognized rent expense for three months on prepaid rent used during the accounting period.
Transcribed Image Text:The following accounting events apply to Mary’s Designs for Year 1: ### Asset Source Transactions 1. **Issued Common Stock**: Acquired $16,000 in cash by issuing common stock. 2. **Service Revenue**: Performed services and collected $900 in cash. 3. **Unearned Revenue**: Collected $4,900 in advance for services to be provided over the next 12 months. 4. **Accounts Receivable**: Provided $12,200 of services on account. 5. **Supply Purchase**: Purchased $470 of supplies on account. ### Asset Exchange Transactions 6. **Land Purchase**: Bought land for $4,200 in cash. 7. **Cash Collection**: Collected $7,100 from accounts receivable. 8. **Supply Purchase**: Purchased $420 of supplies with cash. 9. **Prepaid Rent**: Paid $3,700 for one year’s rent in advance. ### Asset Use Transactions 10. **Salary Payment**: Paid $2,800 in cash for employee salaries. 11. **Dividends**: Paid a $1,900 cash dividend to stockholders. 12. **Accounts Payable**: Settled $470 of accounts payable with cash. ### Claims Exchange Transactions 13. **Advertisement Expense**: Placed a $150 advertisement in a local newspaper on account. 14. **Utility Expense**: Incurred a $115 utility expense on account. ### Adjusting Entries 15. **Revenue Recognition**: Recognized $3,675 of revenue for services performed; cash was collected earlier (as noted in Event 3). 16. **Accrued Salaries**: Recorded $1,480 of accrued salaries at the end of Year 1. 17. **Supplies Expense**: Recognized the cost of supplies used; $90 of supplies were on hand at the accounting period's end. 18. **Prepaid Rent**: Recognized rent expense for three months on prepaid rent used during the accounting period.
**Instruction:** Prepare a before-closing trial balance. --- **MARY'S DESIGNS** **Before-Closing Trial Balance** **December 31, Year 1** | Account Titles | Debit | Credit | |----------------|-------|--------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | **Total** | **$0** | **$0** | --- This table represents a before-closing trial balance for "Mary's Designs" as of December 31, Year 1. It is a structured format with columns for account titles, debit amounts, and credit amounts. Each row would normally be filled with specific account information, but here it is left blank to be filled with the respective financial data. The objective is to ensure that the total debits equal the total credits.
Transcribed Image Text:**Instruction:** Prepare a before-closing trial balance. --- **MARY'S DESIGNS** **Before-Closing Trial Balance** **December 31, Year 1** | Account Titles | Debit | Credit | |----------------|-------|--------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | **Total** | **$0** | **$0** | --- This table represents a before-closing trial balance for "Mary's Designs" as of December 31, Year 1. It is a structured format with columns for account titles, debit amounts, and credit amounts. Each row would normally be filled with specific account information, but here it is left blank to be filled with the respective financial data. The objective is to ensure that the total debits equal the total credits.
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