The post-closing trial balance for Wilson Corp., a retailer, at December 31, 2019, follows. Acc. No. Description Debit Credit 101 Cash 27,000 0 102 Accounts receivable 21,000 103 Allowance for doubtful accounts 1,000 104 Inventory (perpetual inventory system) 35,000
Applying the Entire Accounting Cycle
The post-closing
| Acc. No. | Description | Debit | Credit |
|---|---|---|---|
| 101 | Cash | 27,000 | 0 |
| 102 | 21,000 | ||
| 103 | Allowance for doubtful accounts | 1,000 | |
| 104 | Inventory (perpetual inventory system) | 35,000 | |
| 105 | Prepaid insurance (20 months remaining) | 900 | |
| 200 | Equipment (20-year estimated life, no residual value) | 50,000 | |
| 201 | 22,500 | ||
| 300 | Accounts payable | 7,500 | |
| 301 | Salaries payable | ||
| 302 | Income taxes payable (for 2019) | 4,000 | |
| 400 | Common stock, par $1 | 80,000 | |
| 401 | 18,900 | ||
| 500 | Sales | ||
| 600 | Cost of goods sold | ||
| 601 | Operating expenses | ||
| 602 | Income tax expense | ||
| 700 | Income summary | ||
| Total | $133,900 | $133,900 |
The following transactions occurred during 2020 in the order shown (use the number at the left in place of a date).
1. Sales revenue was $30,000, of which $10,000 was on credit; the cost, provided using perpetual inventory, was $19,500.
2. Collected $17,000 cash on accounts receivable.
3. Paid $4,000 cash toward income taxes payable (2019).
4. Purchased $40,000 of merchandise, of which $8,000 was on credit.
5. Paid $6,000 cash toward accounts payable.
6. Sales revenue was $72,000 (in cash); cost was $46,800.
7. Paid $19,000 cash in operating expenses.
8. On July 1, 2020, issued 1,000 shares of common stock, par $1, for $1,000 cash.
9. Purchased $100,000 of merchandise, of which $27,000 was on credit.
10. Sales revenue was $98,000, of which $30,000 was on credit; cost, $63,700.
11. Collected $26,000 cash toward accounts receivable.
12. Paid $28,000 cash toward accounts payable.
13. Paid $18,000 cash for various operating expenses.
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