XYZ Corporation began operations on January 1, 2023. During the first month of operations, the company had the following transactions:
Required: a) Record the transactions in the journal. b) Prepare the trial balance as of January 31, 2023.
Solution:
a) Journal Entries:
b) Trial Balance as of January 31, 2023:
| Account Title | Debit ($) | Credit ($) |
|---|---|---|
| Cash | 12,000 | – |
| Equipment | 5,000 | – |
| Accounts Receivable | 2,000 | – |
| Common Stock | – | 10,000 |
| Service Revenue | – | 7,000 |
| Salaries Expense | 3,000 | – |
|---|---|---|
| Total | 20,000 | 20,000 |
This solution provides a basic overview of how transactions are recorded and summarized in the trial balance, a critical step in the accounting cycle.