Atkins Advertising Agency began business on January 2. The transactions entered into by Atkins during its first month of operations are as follows:
a. | Acquired its articles of incorporation from the state and issued 100,000 shares of capital stock in exchange for $200,000 in cash. |
b. | Purchased an office building for $150,000 in cash. The building is valued at $110,000, and the remainder of the value is assigned to the land. |
c. | Signed a three-year promissory note at the bank for $125,000. |
d. | Purchased office equipment at a cost of $50,000, paying $10,000 down and agreeing to pay the remainder in ten days. |
e. | Paid wages and salaries of $13,000 for the first half of the month. Office employees are paid twice a month. |
f. | Paid the balance due on the office equipment. |
g. | Sold $24,000 of advertising during the first month. Customers have until the 15th of the following month to pay their bills. |
h. | Paid wages and salaries of $15,000 for the second half of the month. |
i. | Recorded $3,500 in commissions earned by the salespeople during the month. They will be paid on the fifth of the following month. |
Atkins Advertising Agency | ||
Trial Balance | ||
January 31 | ||
Debits | Credits | |
Cash | $ | $ |
Accounts receivable | ||
Land | ||
Building | ||
Office equipment | ||
Commissions payable | ||
Notes payable | ||
Capital stock | ||
Advertising revenue | ||
Wage and salary expense | ||
Commissions expense | ||
Totals | $ | $ |
Get Answers For Free
Most questions answered within 1 hours.