Acquired $18,500 cash from the issue of common stock. Purchased inventory for $7,000 cash. Sold inventory costing $4,200 for $7,140 cash. Paid $850 for advertising expense. Required. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits.

Explanation:

Entries  

On the issuance of stock  

Cash18500  

Share capital18500

On purchase of inventory  

Stock  7000  

Cash7000

On the disposal of inventory  

Cash7140  

inventory4200

Gain On disposal2940

Advetisement Expense  

Expense  850  

Cash850

                                     T-Accounts

Cash and Bank

Opening0  

Share capital18500                            Stock7000

Sale7140                                            Adv. Expense850

                                                      Closing17790

Stock    

Opening0  

Cash7000                                    Cash Sale4200

                                                    Closing2800

Share Capital    

                                                   opening0

                                                   Cash  18500

Closing18500  

Gain On disposal    

                                                    opening0

                                                    Cash  2940

Closing2940  

Advetisement Expense    

Opening0  

Cash850                                               profit and loss850

                                                       Closing  0

the trail balance is prepared at end of reporting to reconcile the closing debit credit during the year occurred on transactions. closing balace are put in according to their nature such as liability and equity  account is credit nature account and asset and expense is debit nature account as prepared below

Trail Balance  

Particular        Debit      Credit

Cash                 17790  

Stock                 2800  

Share Capital                       18500

Gain                                2940

Advvertisement850  

Closing Balance2144021440

answerblank(1) //inferiorblank(2) ramen noodles;