P269B Learning Objectives 4 6 Analyze the impact of business

P2-69B. (Learning Objectives 4, 6: Analyze the impact of business transactions on accounts; construct and use a trial balance) During the first month of operations (May 2016), Spahr Music Corporation completed the following selected transactions a. The business received cash of $50,000 and a building with a fair value of $106,000 The corporation issued common stock to the stockholders b. Borrowed $63,000 from the bank; signed a note payable c. Paid $44,000 for music equipment. d. Purchased supplies on account, $210 e. Paid employees\' salaries, S5,900 f. Received $3,700 for music service performed for customers. g. Performed service for customers on account, $13,100 h. Paid $200 of the account payable created in transaction d. i. Received a $600 bill for utilities expense that will be paid in the near future j. Received cash on account, $1,700 k. Paid the following cash expenses: (1) rent, $1,200; (2) advertising, $300 Requirements 1. Record each transaction directly in the T-accounts without using a journal. Use the letters to identify the transactions. 2. Prepare the trial balance of Spahr Music Corporation at May 31,2016

Solution

Answer 1. Cash Accounts Receivable Office Supplies a.      50,000.00    44,000.00 c. g.    13,100.00      1,700.00 j. d.       210.00 b.      63,000.00      5,900.00 e. f.        3,700.00          200.00 h. j.        1,700.00      1,500.00 k. End. Bal.      66,800.00 End. Bal.    11,400.00 End. Bal.       210.00 Building Music Equipment Common Stock a.    106,000.00 c.    44,000.00    156,000.00 a. . End. Bal.    106,000.00 End. Bal.    44,000.00 End. Bal.    156,000.00 Notes Payable Accounts Payable Service Revenue    63,000.00 b. h.          200.00          210.00 d.        3,700.00 f.      13,100.00 g. End. Bal.    63,000.00 End. Bal.            10.00 End. Bal.      16,800.00 Utilities Expenses Salary Expense Utilities Payable i.            600.00 e.      5,900.00            600.00 i. End. Bal.            600.00 End. Bal.      5,900.00 End. Bal.            600.00 Rent Expenses Advertising Expenses k.        1,200.00 k.          300.00 End. Bal.        1,200.00 End. Bal.          300.00 Answer 2. Spahr Music Corporation Trial Balance At May 31, 2016 Particulars Dr. Amt. Cr. Amt. Cash      66,800.00 Accounts Receivable      11,400.00 Office Supplies            210.00 Building    106,000.00 Music Equipment      44,000.00 Accounts Payable              10.00 Utilities Payable            600.00 Notes Payable      63,000.00 Common Stock    156,000.00 Service Revenue      16,800.00 Utilities Expenses            600.00 Salary Expense        5,900.00 Rent Expenses        1,200.00 Advertising Expenses            300.00 Total    236,410.00    236,410.00