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The homework question involves analyzing and recording financial transactions for Ruffles Hairstyling and M. L. Cheung Real Estate.

Accounting

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Here are the calculated account balances and the trial balance for Ruffles Hairstyling as of October 7, 20-.

  1. List initial balances from the September 30 Balance Sheet.

    • Cash: $7,800 (Debit)
    • Accounts Receivable: $600 (Debit)
    • Supplies: $2,400 (Debit)
    • Land: $30,000 (Debit)
    • Building: $90,000 (Debit)
    • Equipment: $40,000 (Debit)
    • Accounts Payable: $800 (Credit)
    • Bank Loan: $2,700 (Credit)
    • Mortgage Payable: $88,000 (Credit)
    • C. Williams, Capital: $79,300 (Credit)

  2. Record the October 1-7 transactions in T-accounts and calculate final balances.

    Cash

    DebitCreditBal. Sept 307,800Oct 4 (A/R)500Oct 4 (Mortgage)900Oct 6 (Bank Loan)10,000Oct 5 (Equipment)3,000Oct 7 (A/P)975Bal. Oct 713,425\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline \text{Bal. Sept 30} \quad 7,800 & \\ \text{Oct 4 (A/R)} \quad 500 & \text{Oct 4 (Mortgage)} \quad 900 \\ \text{Oct 6 (Bank Loan)} \quad 10,000 & \text{Oct 5 (Equipment)} \quad 3,000 \\ & \text{Oct 7 (A/P)} \quad 975 \\ \hline \textbf{Bal. Oct 7} \quad \mathbf{13,425} & \\ \hline \end{array}

    Accounts Receivable

    DebitCreditBal. Sept 30600Oct 4 (Cash)500Bal. Oct 7100\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline \text{Bal. Sept 30} \quad 600 & \\ & \text{Oct 4 (Cash)} \quad 500 \\ \hline \textbf{Bal. Oct 7} \quad \mathbf{100} & \\ \hline \end{array}

    Supplies

    DebitCreditBal. Sept 302,400Oct 2 (A/P)250Oct 3 (A/P)75Bal. Oct 72,575\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline \text{Bal. Sept 30} \quad 2,400 & \\ \text{Oct 2 (A/P)} \quad 250 & \text{Oct 3 (A/P)} \quad 75 \\ \hline \textbf{Bal. Oct 7} \quad \mathbf{2,575} & \\ \hline \end{array}

    Land

    DebitCreditBal. Sept 3030,000Bal. Oct 730,000\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline \text{Bal. Sept 30} \quad 30,000 & \\ \hline \textbf{Bal. Oct 7} \quad \mathbf{30,000} & \\ \hline \end{array}

    Building

    DebitCreditBal. Sept 3090,000Bal. Oct 790,000\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline \text{Bal. Sept 30} \quad 90,000 & \\ \hline \textbf{Bal. Oct 7} \quad \mathbf{90,000} & \\ \hline \end{array}

    Equipment

    DebitCreditBal. Sept 3040,000Oct 5 (Cash/A/P)12,000Bal. Oct 752,000\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline \text{Bal. Sept 30} \quad 40,000 & \\ \text{Oct 5 (Cash/A/P)} \quad 12,000 & \\ \hline \textbf{Bal. Oct 7} \quad \mathbf{52,000} & \\ \hline \end{array}

    Accounts Payable

    DebitCreditBal. Sept 30800Oct 3 (Supplies)75Oct 2 (Supplies)250Oct 7 (Cash)975Oct 5 (Equipment)9,000Bal. Oct 79,000\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline & \text{Bal. Sept 30} \quad 800 \\ \text{Oct 3 (Supplies)} \quad 75 & \text{Oct 2 (Supplies)} \quad 250 \\ \text{Oct 7 (Cash)} \quad 975 & \text{Oct 5 (Equipment)} \quad 9,000 \\ \hline & \textbf{Bal. Oct 7} \quad \mathbf{9,000} \\ \hline \end{array}

    Bank Loan

    DebitCreditBal. Sept 302,700Oct 6 (Cash)10,000Bal. Oct 712,700\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline & \text{Bal. Sept 30} \quad 2,700 \\ & \text{Oct 6 (Cash)} \quad 10,000 \\ \hline & \textbf{Bal. Oct 7} \quad \mathbf{12,700} \\ \hline \end{array}

    Mortgage Payable

    DebitCreditOct 4 (Cash)900Bal. Sept 3088,000Bal. Oct 787,100\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline \text{Oct 4 (Cash)} \quad 900 & \text{Bal. Sept 30} \quad 88,000 \\ \hline & \textbf{Bal. Oct 7} \quad \mathbf{87,100} \\ \hline \end{array}

    C. Williams, Capital

    DebitCreditBal. Sept 3079,300Bal. Oct 779,300\begin{array}{c|c} \hline \textbf{Debit} & \textbf{Credit} \\ \hline & \text{Bal. Sept 30} \quad 79,300 \\ \hline & \textbf{Bal. Oct 7} \quad \mathbf{79,300} \\ \hline \end{array}

  3. Prepare the Trial Balance as of October 7, 20-.

    \multicolumn3cRuffles Hairstyling\multicolumn3cTrial Balance\multicolumn3cAs of October 7, 20–AccountDebit ($)Credit ($)Cash13,425Accounts Receivable100Supplies2,575Land30,000Building90,000Equipment52,000Accounts Payable9,000Bank Loan12,700Mortgage Payable87,100C. Williams, Capital79,300Total188,100188,100\begin{array}{lrr} \multicolumn{3}{c}{\textbf{Ruffles Hairstyling}} \\ \multicolumn{3}{c}{\textbf{Trial Balance}} \\ \multicolumn{3}{c}{\textbf{As of October 7, 20--}} \\ \hline \textbf{Account} & \textbf{Debit (\$)} & \textbf{Credit (\$)} \\ \hline \text{Cash} & 13,425 & \\ \text{Accounts Receivable} & 100 & \\ \text{Supplies} & 2,575 & \\ \text{Land} & 30,000 & \\ \text{Building} & 90,000 & \\ \text{Equipment} & 52,000 & \\ \text{Accounts Payable} & & 9,000 \\ \text{Bank Loan} & & 12,700 \\ \text{Mortgage Payable} & & 87,100 \\ \text{C. Williams, Capital} & & 79,300 \\ \hline \textbf{Total} & \mathbf{188,100} & \mathbf{188,100} \\ \hline \end{array}

    The total debits and credits are equal, so the trial balance is balanced.

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