Trial Balance Use the following account balance information

Trial Balance Use the following account balance information to construct a trial balance: Cost of Goods Sold Accounts Payable Paid-In Capital Cash $9,000 Sales $10,000 700 1,000 4,000 1,100 Dividends 2,000 Retained Earnings (beginning) 400 Inventory

Solution

Step-1:Prepare Income Statement Sales $ 10,000 Less:Cost of goods sold $   9,000 Net Income $   1,000 Step-2:Prepare Retained Earning Statement Retained Earning(Beginning) $   1,000 Add:Net Income $   1,000 Less:Dividend $     700 Retained Earning(Ending) $   1,300 Step-3:Now prepare Balance sheet Cash $     400 Accounts Payable $   1,100 Inventory $   4,000 Current Liabilities $   1,100 Current Assets $   4,400 Long term debt 0 Total Liabilities $   1,100 Property,Plant and Equipment 0 Stockholder\'s Equity: Paid-in Capital $   2,000 Retained Earning(Ending) $   1,300 Total Stockholder\'s Equity $   3,300 Total Assets $   4,400 Total liablities and equity $   4,400