Question

Following are the transactions of a new company called Pose-for-Pics

Answer 1

Answer:

Pose-for-Pics

1. T-accounts:

Cash

Date         Accounts Titles            Debit      Credit

Aug. 1      Common stock           $6,500

Aug. 2     Prepaid Insurance                       $2,100

Aug. 5     Office supplies                                 880

Aug. 20   Photography Fees        3,331

Aug. 31    Utilities                                             675

Aug. 31    Balance                                       $6,176

Common Stock

Date         Accounts Titles            Debit      Credit

Aug. 1       Cash                                           $6,500

Aug. 1       Photography Equipment           33,500

Aug. 31     Balance                       $40,000

Photography Equipment

Date         Accounts Titles            Debit      Credit

Aug. 1      Common stock           $33,500

Prepaid Insurance

Date         Accounts Titles            Debit      Credit

Aug. 2      Cash                             $2,100

Office Supplies

Date         Accounts Titles            Debit      Credit

Aug. 4      Cash                                $880

Photography Fees

Date         Accounts Titles            Debit      Credit

Aug. 20    Cash                                             $3,331

Utilities

Date         Accounts Titles            Debit      Credit

Aug. 31     Cash                             $675

2. Pose-for-Pics

Trial Balance

As of August 31:

Accounts Titles            Debit      Credit

Cash                           $6,176

Common stock                          $40,000

Equipment                33,500

Prepaid Insurance      2,100

Office supplies             880

Photography Fees                        3,331

Utilities expense          675

Totals                    $43,331      $43,331

Explanation:

T-accounts are the general ledger accounts where the transactions of Pose-for-Pics are summarized.  From the T-accounts, the Trial Balance can be prepared to show the list of account balances from the general ledger.  The Trial Balance forms the first basis for the preparation of financial statements after adjustments have been made for accruals, prepayments, deferred revenue, and depreciation expenses.  The Trial Balance may also show that the accounts have been correctly posted with corresponding debit and credit entries.