The balance sheet accounts of Red Lake Appliance Company had the following balances on December 31, 20X1:

Operating space and equipment are rented on a month-to-month basis. A summary of January 20X2 transactions follows:
a. Collected $24,000 on accounts receivable.
b. Sold appliances for $60,000 cash and $45,000 on open account.
c. Cost of appliances sold was $56,000.
d. Paid $25,000 on accounts payable.
e. Replenished inventory for $64,000 on open account.
f. Paid selling expense in cash, $33,000.
g. Paid rent expense in cash, $7,000.
h. Paid interest expense in cash, $2,000.

1. Open the appropriate T-accounts in the general ledger. In addition to the seven accounts listed in the trial balance of December 31, open accounts for Sales, Cost of Goods Sold, Selling Expense, Rent Expense, and Interest Expense. Enter the December 31 balances in the accounts.
2. Journalize transactions a through h. Post the entries to the ledger, keying by transaction letter.
3. Prepare a trial balance for the month ended January 31, 20X2.

  • CreatedFebruary 20, 2015
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