Downtown Company, a retailer, had the following account balances as of April 30, 2003:
|
Cash
|
10,100
|
|
|
Accounts Receivable
|
4,900
|
|
|
Inventory
|
16,000
|
|
|
Land
|
26,000
|
|
|
Building
|
24,000
|
|
|
Furniture
|
4,000
|
|
|
Notes Payable.
|
$25,000
|
|
Accounts Payable
|
12,000
|
|
Capital Stock.
|
30,000
|
|
Retained Earnings.
|
18,000
|
|
Totals
|
$85,000
|
$85,000
|
During May, the company completed the following transactions.
May 3 Paid one-half of 4/30/03 accounts payable.
May 6 Collected all of 4/30/03 accounts receivable.
May 7 Sold inventory costing $7,700 for $6,000 cash and $4,000 on account.
May 8 Sold one-half of the land for $13,000, receiving $8,000 cash plus a note for $5,000.
May 10 Purchased inventory on account, $10,000.
May 15 Paid installment of $5,000 on notes payable (entire amount reduces the liability account).
May 21 Issued additional capital stock for $2,000 cash.
May 23 Sold inventory costing $4,000 for $7,500 cash.
May 25 Paid salaries of $2,000.
May 26 Paid rent of $500.
May 29 Purchased desk for $500 cash.
Required
1. Prepare the journal entry for each transaction.
2. Set up T-accounts with the proper account balances at April 30, 2003, and post the entries to the T-accounts.
3. Prepare a trial balance as of May 31, 2003.