Prompt Title: finanace

Let's go through the transactions one by one and journalize them. After that, we'll post to the ledger accounts and prepare a trial balance. Note that the dates provided in your question are from a past month and year; however, for the purposes of this example, we will use the dates as given.

Journal Entries

May 1:

• Debit Cash (101) $20,000
• Credit Owner’s Capital (301) $20,000 (Owner investment in the business)

May 2: (Note: This transaction does not require an entry on May 2 because no payment has been made or expense has been incurred yet; the expense will be recorded when it is paid.)

May 3:

• Debit Supplies (126) $2,500
• Credit Accounts Payable (201) $2,500 (Purchase of supplies on account)

May 7:

• Debit Rent Expense (729) $900
• Credit Cash (101) $900 (Payment of office rent for the month)

May 11:

• Debit Accounts Receivable (112) $3,200
• Credit Service Revenue (400) $3,200 (Services provided on account)

May 12:

• Debit Cash (101) $3,500
• Credit Unearned Service Revenue (209) $3,500 (Receipt of cash for services to be provided in the future)

May 17:

• Debit Cash (101) $1,200
• Credit Service Revenue (400) $1,200 (Receipt of cash for services completed)

May 31:

• Debit Salaries and Wages Expense (726) $2,000
• Credit Cash (101) $2,000 (Payment of salary to secretary-receptionist)

May 31:

• Debit Accounts Payable (201) $1,500 [60% of $2,500]
• Credit Cash (101) $1,500 (Payment of 60% of balance due to Read Supply Company)

Ledger Accounts Posting

I will describe the process of posting as it is not possible to create actual ledger accounts in this format:

1. For each debit entry, you would post the amount in the debit side of the respective account.
2. For each credit entry, you would post the amount in the credit side of the respective account.

For instance, for May 1st:

• The Cash account (101) would have a debit of $20,000.
• The Owner’s Capital account (301) would have a credit of $20,000.

This would be done similarly for all the entries until each account has the respective debits and credits from the transactions.

Trial Balance as of May 31

In the trial balance, we list all the accounts with their final debit or credit balance. To ensure the ledger is in balance, the sum of all debit balances should equal the sum of all credit balances.

Here is what the trial balance would look like based on the transactions:

Notice that the totals of the debit and credit columns do not match, which indicates an error in our trial balance. This is likely due to a miscalculation in the Cash account where all transactions involving cash were not accurately accounted for. Let's correct this by calculating the net effect on the Cash account:

• Starting with $20,000
• Plus $3,500 (May 12)
• Plus $1,200 (May 17)
• Less $900 (May 7 rent expense)
• Less $2,000 (May 31 salary expense)
• Less $1,500 (May 31 payment to Read Supply)

So the corrected Cash account balance should be:

$20,000 + $3,500 + $1,200 - $900 - $2,000 - $1,500 = $20,300

Let's adjust the trial balance with the corrected cash balance:

Now, the debit and credit columns are equal, which means our trial balance is correct.

Please note that this is a simplified illustration. In practice, additional steps such as adjusting entries, closing entries, and preparation of financial statements would be necessary to complete the accounting cycle.