• June 1: Owner contributed $50,000 in cash to the business.

Question

• June 1: Owner purchased a company vehicle in the amount of $15,000.
• June 3: Owner took out a small business loan in the amount of $25,000.
• June 5: Owner paid rent for June, and prepaid office rent for a 6-month period to cover July through December at $1,195 per month.
• June 5: Owner paid business license fees in the amount of $250 to the county.
• June 5: Owner ordered office supplies, on account, in the amount of $750.00.
• June 6: Owner performed service for client on account in the amount of $1,000.
• June 9: Owner provided service for client in the amount of $1,500. Customer paid $750 at time of service. Client will be billed for the balance due.
• June 10: Owner paid $250 in advertising costs to the local paper.
• June 15: Owner recorded wages due to the part-time employee in the amount of $325. This will be paid on June 20.
• June 15: Owner prepaid business insurance to cover July through December at the rate of $125 per month.
• June 20: Owner paid wages due to part-time employee from period ending June 15.
• June 21: Owner paid for plumbing repairs in the office in the amount of $210.
• June 22: Owner withdrew $1,000 cash for personal use.
• June 23: Customer paid balance due from June 6 service in the amount of $1,000.
• June 25: Owner provided service to client in the amount of $800. Client paid at time of service.
• June 28: Owner paid balance due for office supplies purchase on June 5.
• June 29: Owner performed service for client on account in the amount of $2,225.00.
• June 30: Owner received telephone bill for month of June in the amount of $155 and recorded the expense. This bill will not be paid until July.
• June 30: Last day of pay period; owner owes part-time worker $325 for the June 16 through June 30 pay period. This will be paid on July 5.
• June 30: Record depreciation on vehicle at $250.
make a trial balance

Answer 1

To create a trial balance, we first need to summarize all the transactions into their respective accounts. Below is a simplified chart of accounts and the impacted accounts from the transactions provided. Once we categorize the transactions, we can prepare the trial balance.

Chart of Accounts

1. Assets

   • Cash
   • Accounts Receivable
   • Office Supplies
   • Prepaid Rent
   • Prepaid Insurance
   • Vehicle
   • Accumulated Depreciation - Vehicle

2. Liabilities

   • Accounts Payable
   • Notes Payable (Loan)
   • Wages Payable

3. Equity

   • Owner's Capital
   • Owner's Draw

4. Revenue

   • Service Revenue

5. Expenses

   • Rent Expense
   • Advertising Expense
   • Wages Expense
   • Utilities Expense (Telephone Bill)
   • Depreciation Expense (Vehicle)
   • Repairs Expense (Plumbing)

Summary of Transactions

1. Owner Contributions:

   • Cash: +$50,000
   • Owner's Capital: +$50,000

2. Purchase of Vehicle:

   • Cash: -$15,000
   • Vehicle: +$15,000

3. Small Business Loan:

   • Cash: +$25,000
   • Notes Payable: +$25,000

4. Rent Payment:

   • Cash: -$7,170 (1,195 x 6 months)
   • Prepaid Rent: +$7,170

5. Business License Fees:

   • Cash: -$250
   • Expenses: +$250

6. Office Supplies Purchased on Account:

   • Accounts Payable: +$750
   • Office Supplies: +$750

7. Service Performed on Account (June 6):

   • Accounts Receivable: +$1,000
   • Service Revenue: +$1,000

8. Service Performed with Partial Payment (June 9):

   • Cash: +$750
   • Accounts Receivable: +$750
   • Service Revenue: +$1,500

9. Advertising Payment:

   • Cash: -$250
   • Advertising Expense: +$250

10. Wages Payable Recorded:

    • Wages Payable: +$325
    • Wage Expense: +$325

11. Prepaid Insurance:

    • Cash: -$750 (125 x 6 months)
    • Prepaid Insurance: +$750

12. Wages Paid:

    • Cash: -$325
    • Wages Payable: -$325

13. Plumbing Repairs:

    • Cash: -$210
    • Repairs Expense: +$210

14. Owner's Withdrawal:

    • Cash: -$1,000
    • Owner's Draw: +$1,000

15. Customer Payment Received (June 23):

    • Cash: +$1,000
    • Accounts Receivable: -$1,000

16. Service Performed (June 25):

    • Cash: +$800
    • Service Revenue: +$800

17. Office Supplies Paid (June 28):

    • Cash: -$750
    • Accounts Payable: -$750

18. Service Performed on Account (June 29):

    • Accounts Receivable: +$2,225
    • Service Revenue: +$2,225

19. Telephone Bill Recorded:

    • Utilities Expense: +$155
    • Accounts Payable: +$155 (not paid until July)

20. Wages Payable for Last Pay Period:

    • Wages Payable: +$325
    • Wages Expense: +$325

21. Depreciation on Vehicle:

    • Depreciation Expense: +$250
    • Accumulated Depreciation - Vehicle: +$250

Trial Balance as of June 30

Let's compile the balances from the accounts.

| Account | Debit ($) | Credit ($) | |--------------------------------------|-----------|------------| | Cash | 66,775 | | | Accounts Receivable | 3,975 | | | Office Supplies | 750 | | | Prepaid Rent | 7,170 | | | Prepaid Insurance | 750 | | | Vehicle | 15,000 | | | Accumulated Depreciation - Vehicle | | 250 | | Accounts Payable | | 155 | | Wages Payable | 650 | | | Notes Payable | | 25,000 | | Owner's Capital | | 50,000 | | Owner's Draw | 1,000 | | | Service Revenue | | 5,525 | | Rent Expense | 7,170 | | | Advertising Expense | 250 | | | Wages Expense | 650 | | | Utilities Expense | 155 | | | Repairs Expense | 210 | | | Depreciation Expense | 250 | | | |-----------|------------| | Total | 104,000 | 104,000 |

The total debits equal the total credits, ensuring our trial balance is balanced.