I am trying to prepare an unadjusted trial balance for Aqua Elite, Inc. I have done it twice and it doesnt balance. I am not sure I am doing the right calculations. The information is as follows:
Because Aqua Elite, Inc. is a new startup business, the beginning balances in all the general ledger accounts are zero to start.
Requirements
3. Prepare the unadjusted trial balance for Aqua Elite, Inc.,
at the end of July.
4. Journalize and post the adjusting entries for July based
on the following adjustment information:
a. Record the expired rent.
b. Supplies on hand, $350.
c. Depreciation: $400 equipment, $210 furniture, $650
vehicles.
d. Services performed but unbilled, $1,900.
e. Accrued salaries, $675.
f. Unearned service revenue earned as of July 31, $800.
5. Prepare an adjusted trial balance for Aqua Elite, Inc., at
the end of July.
6. Prepare the Income Statement, Statement of Retained
Earnings, and Balance Sheet for the three-month period
May through July 20XX.
7. Prepare, journalize, and post closing entries.
8. Prepare a Post-Closing Trial Balance for the end of the
period.
May
1
Mike invested $15,000 cash and a used truck worth $13,500 in the business in exchange
for company stock.
3 Paid $4,700 cash to purchase office equipment.
7 Purchased $860 of supplies on account.
12 Performed services for cash customers and received $850.
15 Paid salaries of $675 to the office receptionist.
16 Sold the company truck for $13,500.
18 Signed a note payable for $31,000 to purchase a new truck.
21 Performed $3,200 of services on account for a local hotel chain.
27 Paid $500 of the amount owed from the purchase of supplies on May 7.
30 Received $2,000 on account from credit customers.
31
Received the utility bill for the month of May, $480. The bill is not due until the 15th
of June.
31 Paid $1,000 dividends to the shareholder, XXXXX XXXXXson.
June
1 Paid receptionist’s salary, $675.
2 Paid cash to acquire land for a future office site, $15,000.
3 Moved into a new location for the business and paid the first month’s rent, $1,800.
4 Performed service for a customer and received cash, $1,700.
5 Received $500 on account.
8 Purchased $750 of supplies on account.
11 Billed customers for services performed, $3,800.
13 Sold an additional $10,000 of stock to XXXXX XXXXXson.
16 Paid receptionist’s salary, $675.
17 Received $1,350 cash for services performed.
18 Received $1,500 from customers on account.
19 Paid $325 to be listed in the yellow pages telephone directory.
21 Paid $1,000 on account.
22 Purchased office furniture on account, $3,300.
24 Paid miscellaneous expenses, $275.
26 Billed customers for services provided, $1,000.
28 Received $300 from customers on account.
30 Paid utility bill, $745.
30 Paid receptionist’s salary, $675.
30 Paid $1,800 of dividends.
July
1 Paid three months’ rent, $4,500.
4 Performed service for a customer and received cash, $2,100.
9 Received $3,600 from customers for services to be performed later.
12 Purchased $750 of supplies on account.
15 Billed customers for services performed, $2,800.
16 Paid receptionist’s salary, $675.
22 Received $3,100 on account.
25 Paid $2,800 on account.
28 Received $1,200 cash for services performed.
30 Paid $600 of dividends.
To prepare the unadjusted trial balance for Aqua Elite, Inc. at the end of July, follow these steps:
1. Create a trial balance worksheet with three columns: Account Name, Debit, and Credit.
2. List all the general ledger accounts in the Account Name column. Since this is a startup business with zero beginning balances, the list will only include the accounts from the July transactions.
3. For each account, determine whether it has a debit or credit balance based on the transactions.
4. Enter the debit amounts in the Debit column and the credit amounts in the Credit column.
5. Calculate the total debit and total credit amounts.
6. Check if the totals of the Debit and Credit columns are equal. If they are not equal, the trial balance does not balance, and there may be errors in the calculation or recording of the transactions.
Here is the step-by-step procedure for preparing the unadjusted trial balance for Aqua Elite, Inc. at the end of July:
1. List all the general ledger accounts:
- Cash
- Accounts Receivable
- Supplies
- Prepaid Rent
- Prepaid Insurance
- Land
- Office Equipment
- Accumulated Depreciation - Office Equipment
- Furniture
- Accumulated Depreciation - Furniture
- Vehicles
- Accumulated Depreciation - Vehicles
- Accounts Payable
- Salaries Payable
- Unearned Revenue
- Note Payable
- Common Stock
- Retained Earnings
- Dividends
- Service Revenue
- Rent Expense
- Insurance Expense
- Depreciation Expense - Office Equipment
- Depreciation Expense - Furniture
- Depreciation Expense - Vehicles
- Supplies Expense
- Salaries Expense
- Utilities Expense
2. Determine the appropriate balance for each account based on the transactions in the given information. Since all beginning balances are zero, you will only consider the transactions from May, June, and July.
3. Enter the debit amounts in the Debit column and the credit amounts in the Credit column. Make sure to place each amount in the corresponding account row.
4. Calculate the total of the Debit column and the total of the Credit column.
5. Compare the totals of the Debit and Credit columns. If they are equal, the trial balance balances. If they are not equal, there may be errors in the calculations or recording of the transactions.
By following these steps, you will be able to prepare the unadjusted trial balance for Aqua Elite, Inc. at the end of July.
To prepare the unadjusted trial balance for Aqua Elite, Inc. at the end of July, you need to follow these steps:
1. Make a list of all the general ledger accounts mentioned in the information provided. These accounts include cash, accounts receivable, supplies, equipment, furniture, vehicles, rent expense, depreciation expense, services revenue, salaries expense, unearned service revenue, etc.
2. Determine the balances of these accounts at the end of July. Since it is mentioned that the beginning balances in all the general ledger accounts are zero, you need to consider all the transactions and adjustments made during the months of May, June, and July to calculate the ending balances.
3. For the accounts that involve cash, append the "+" sign for cash received and the "-" sign for cash paid in each transaction. For example, if Aqua Elite, Inc. received $2,000 cash on account on May 30, you would write "+$2,000" in the cash account column.
4. For all other accounts, interpret each transaction and adjustment to determine whether it increases (+) or decreases (-) the balance in the respective account. For example, when Aqua Elite, Inc. records an expense like rent or salaries paid, you would write "-" followed by the amount in the respective expense account column.
5. Add up all the amounts (+ or -) for each account to calculate the balance at the end of July.
6. Once you have calculated the ending balance for each account, prepare a trial balance by listing all the accounts and their respective balances. The trial balance should have two columns: one for the account titles and the other for the corresponding balances.
7. Finally, total the debit and credit columns on the trial balance to ensure that they are equal. If they are not equal, recheck the calculations and postings for any errors.
Remember, the trial balance only includes the unadjusted balances of the accounts. It is used as a starting point for making adjusting entries and preparing the adjusted trial balance to ensure accuracy in the financial statements.