Recording Transactions in T-Accounts Georgia Supply Corporation, a merchandising firm, prepared the… 1 answer below »

Recording Transactions in T-Accounts

Georgia Supply Corporation, a merchandising firm, prepared the following trial balance as of October 1: 

Debit

Credit

Cash              

$150,000 

Accounts Receivable   

21,540 

Inventory           

32,680 

Land              

15,400 

Building            

14,000 

Accounts Payable     

 

$ 9,190

Mortgage Payable     

 

23,700

Common Stock      

 

140,000

Retained Earnings

 

60,730

Totals            

$233,620

$233,620

Georgia Supply engaged in the following transactions during October 2008. The company records inventory using the perpetual system.

Oct. 1 Sold merchandise on account to the Tracker Corporation for $12,000; terms 2/10, n/30, FOB shipping point. Tracker paid $350 freight on the goods. The merchandise cost $6,850.

5 Purchased inventory costing $10,250 on account; terms n/30.

7 Received payment from Tracker for goods shipped October 1.

15 The payroll paid for the first half of October was $22,000. (Ignore payroll taxes.)

18 Purchased a machine for $8,600 cash.

22 Declared a dividend of $0.45 per share on 45,000 shares of common stock outstanding.

27 Purchased building and land for $125,000 in cash and a $225,000 mortgage payable, due in 30 years. The land was appraised at $150,000 and the building at $300,000.

1. Prepare T-accounts for all items in the October 1 trial balance and enter the initial balances.

2. Record the October transactions directly to the T-accounts.

3. Prepare a new trial balance as of the end of October.