Question

The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2020.

Account Title Debits Credits
Cash 5,200
Accounts receivable 2,200
Inventory 5,200
Equipment 11,200
Accumulated depreciation 3,700
Accounts payable 3,200
Accrued liabilities 0
Common stock 8,000
Retained earnings 8,900
Sales revenue 0
Cost of goods sold 0
Salaries expense 0
Rent expense 0
Advertising expense 0
Totals 23,800 23,800

The following transactions occurred during January 2021:

Jan.

1 Sold merchandise for cash, $3,700. The cost of the merchandise was $2,200. The company uses the perpetual inventory system.
2 Purchased equipment on account for $5,700 from the Strong Company.
4 Received a $100 invoice from the local newspaper requesting payment for an advertisement that Whitlow placed in the paper on January 2.
8 Sold merchandise on account for $5,200. The cost of the merchandise was $3,000.
10 Purchased merchandise on account for $9,600.
13 Purchased equipment for cash, $700.
16 Paid the entire amount due to the Strong Company.
18 Received $4,400 from customers on account.
20 Paid $700 to the owner of the building for January’s rent.
30 Paid employees $3,200 for salaries for the month of January.
31 Paid a cash dividend of $800 to shareholders.

Required:
Post the transactions into the appropriate T-accounts.

Answer 1

Answer:

Whitlow Manufacturing Corporation

T-accounts:

Cash

Date     Account Title               Debits      Credits

Jan. 1    Balance c/d               $5,200

Jan. 1    Sales                            3,700

Jan. 13  Equipment                                      $700

Jan. 16  Accounts Payable                         5,700

Jan. 18  Accounts Receivable 4,400

Jan. 20 Rent                                                 700

Jan. 31  Dividend                                          800

Accounts receivable

Date     Account Title       Debits      Credits

Jan. 1    Balance c/d        $2,200

Jan. 2   Sales Revenue    5,200

Jan. 18  Cash                                     $4,400

Inventory

Date     Account Title         Debits      Credits

Jan. 1    Balance c/d          $5,200

Jan. 1    Cost of goods sold                2,200

Jan. 1    Cost of goods sold                3,000

Jan. 10  Accounts Payable 9,600

Equipment

Date     Account Title        Debits      Credits

Jan. 1    Balance c/d         $11,200

Jan. 2   Accounts Payable 5,700

Jan. 13  Cash                         700

Accumulated depreciation

Date     Account Title       Debits      Credits

Jan. 1    Balance c/d                         $3,700

Accounts payable

Date     Account Title       Debits      Credits

Jan. 1    Balance c/d                         $3,200

Jan. 1    Equipment (Strong Co.)        5,700

Jan. 10  Inventory                              9,600

Jan. 16  Cash                   $5,700

Accrued liabilities

Date     Account Title       Debits      Credits

Jan. 4   Advertising Exp.   $100

Common stock

Date     Account Title       Debits      Credits

Jan. 1    Balance c/d                         $8,000

Retained earnings

Date     Account Title       Debits      Credits

Jan. 1    Balance c/d                         $8,900

Sales revenue

Date     Account Title       Debits      Credits

Jan. 1    Cash                                     $3,700

Jan. 8   Accounts Receivable            5,200

Cost of goods sold

Date     Account Title       Debits      Credits

Jan. 1    Inventory            $2,200

Jan. 8    Inventory             3,000

Salaries expense

Date     Account Title       Debits      Credits

Jan. 30 Cash                  $3,200

Rent expense

Date     Account Title       Debits      Credits

Jan. 20 Cash                    $700

Advertising expense

Date     Account Title       Debits      Credits

Jan. 4   Accrued liabilities  $100

Dividend

Date     Account Title       Debits      Credits

Jan. 31  Cash                    $800

Explanation:

The T-account is an accounting tool for recording financial transactions based on the double-entry bookkeeping system with debit and credit sides.  These days T-accounts are not necessary presented in the T-form.  The most important thing is to maintain the debit and credit columns of each account and post transactions according to generally accepted accounting principles.