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    springsmama's Avatar
    springsmama Posts: 1, Reputation: 1
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    #1

    Oct 5, 2008, 11:35 AM
    Preparing a Trial Balance
    The question is:
    Prepare an August 31 trial balance for Pose-for-Pics. Open these T-accounts: Cash; Office Supplies; Prepaid Insurance; Photography Equipment; H. Paris, Capital; Photography Fees Earned; and Utilities Expense. Post the general journal entries to these T-accounts (which will serve as the ledger), and prepare a trial balance.
    The transactions are: Aug. 1: Hashim Paris, the owner, invested $7,500 cash and $32,500 of photography equipment in the business.
    1: Paid $3,000 cash for an insurance policy covering the next 24 months.
    5: Purchased office supplies for $1,400 cash.
    20: Received $2,650 cash in photography fees earned.
    31: Paid $875 cash for August utilities.

    As far as I can tell I have assets of $7500, 32500, and 2650.
    And expenses of $3000, 1400, 875, and 32500.
    Is that right?

    I know that Trial Balances require the sum of the credits to equal the sum of the debits- I just don't know how to work it out. Please help!
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #2

    Oct 15, 2008, 02:31 PM

    The following accounts and balances you should have:

    Cash 4,875
    Equipment 32,500
    PrePaid Insurance 3,000
    Office Supplies 1,400
    Utilities Expense 875
    Owner's Equity 40,000
    Photography Fees Earned 2,650

    Your total Debits & Credits should equal 42,650.


    Nete: Your Debits must Equal your Credits.
    For every transaction there is at least one Debit and at least one Credit.

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