Assignment A-2.1
The trial balance of Kirk Used Auto Company, on March 31, 20X8, follows:
Account Title Debit Credit
Cash $10,000
Accounts Receivable 20,000
Automobile Inventory 100,000
Accounts Payable $3,000
Notes Payable 70,000
Kirk, owner's equity 57,000
Total $130,000 $130,000
This business is a sole proprietorship, thus the equity account used here is Kirk, Owner's Equity. In practice, it is often called Kirk, Capital.
Kirk rented operating space and equipment on a month-to month basis. During April, the business had the following summarized transactions:
a. Invested additional $20,000 cash in the business.
b. Collected $10,000 on accounts receivable.
c. Paid $2,000 on accounts payable.
d. Sold autos for $120,000 cash.
e. Cost of autos sold was $70,000
f. Replenished inventory for $60,000 cash
g. Paid rent expense in cash, $14,000
h. Paid utilities in cash, $1,000
i. Paid selling expense in cash, $30,000
j. Paid interest expense in cash, $1,000
- Journalize transactions a to j above and post the entries to the ledger.
- Open T-accounts for the accounts in the trial balance and the following to it: sales, cost of goods sold, rent expense, utilities expense, selling expense, and interest expense. Enter the March 31st balances in the appropriate accounts.
- Prepare the trial balance as of April 30, 20X8.
- Prepare an income statement for April. Ignore income taxes.
- Provide the closing entries.
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