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Following are the transactions of a new company called Pose-for-Pics.
Aug.1 Madison Harris, the owner, invested $8,300 cash and $35,300 of photography equipment in the company in exchange for common stock.
2 The company paid $3,900 cash for an insurance policy covering the next 24 months.
5 The company purchased office supplies for $1,060 cash.
20 The company received $5,131 cash in photography fees earned.
31 The company paid $855 cash for August utilities.
1 Madison Harris, the owner, invested $8,300 cash and $35,300 of photography equipment in the company in exchange for common stock.
2 The company paid $3,900 cash for an insurance policy covering the next 24 months.
3 The company purchased office supplies for $1,060 cash.
4 The company received $5,131 cash in photography fees earned.
5 The company paid $855 cash for August utilities.

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anthougo

Question Requirement:

Prepare an August 31st Trial Balance

Answer:

Pose-for-Pics

Trial Balance as of August 31st

Description                              Debit                Credit

Cash                                       $7,616

Photography Equipment      35,300

Common Stock                                             $43,600

Prepaid Insurance                  3,900

Supplies                                   1,060

Photography fees earned                                 5,131

Utilities                                       855

Total                                    $48,731             $48,731

Explanation:

a) Common Stock

Cash             8,300

Equipment 35,300

Total          43,600

b) Cash account:

Common stock $8,300

Insurance           (3,900)

Supplies             (1,060)

Fees                     5,131

Utilities                 (855)

Balance             $7,616

c) A trial balance is a list of general ledger balances at the end of a period.  It is an accounting tool to ensure that the two sides of the double entry bookkeeping are in balance.  Discrepancies are sorted out, if any.  It forms the basis for preparing the financial statements whereby temporary accounts are transferred to the income summary while the permanent accounts are taken to the balance sheet, after all adjustments have been made.

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