Gamma Company had total assets (cash and inventories) of $50,000, total liabilities of $30,000, and stockholders’ equity of $20,000 at the beginning of 20X0. During the year Gamma purchased inventory for $65,000 cash and sold all of that inventory for $100,000 cash. Total expenses other than cost of goods sold were $20,000, all paid in cash.
1. Enter the beginning balances into three T-accounts: Total Assets, Total Liabilities, and Stockholders’ Equity.
2. Prepare journal entries for the transactions in 20X0. Post the inventory purchases, sales revenue, and expenses to the three T-accounts, opening new accounts for revenues and expenses as needed.
3. Prepare a trial balance at the end of 20X0.

  • CreatedFebruary 20, 2015
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