Reference no: EM132476175

Problem Gray Co., Inc. Starts Business

• This problem repeats Gray Co.'s January transactions from Chapter 2. Print the forms on the following pages and use them to problem.

Requirement 1

Point A. Gray Co. has the following General Ledger accounts: Common Stock, Equipment, Inventory, Note Payable, and Cash. Label the "T" accounts using these account names.

Point B. Put Dr and Cr Labels at the top of each "T" account. Also put "+" and "-" signs above the Dr and Cr Labels.

Point C. Because Gray Co. started business on January 1, 2009; put a beginning balance of zero in each account. Label these amounts as "Beg. Bal."

Requirement 2

For each of the following transactions make the required entries in the General Journal:

Jan 01 The new owners of Gray Co. invest $10,000 of cash in the business.

Jan 05 Gray Co. gets an $8,000 loan from the bank and signs a note for the loan. As an incentive to make the loan, the bank agrees to not charge interest for January.

Jan 10 $5,000 of equipment is purchased for cash.

Jan 31 $7,000 of merchandise inventory is purchased for cash.

Requirement 3

Question 1: Post the entries from the General Journal to the General Ledger accounts.

Requirement 4

Question 2: Compute an ending balance for each General Ledger account. Be sure to place a "total line" in each account and the label "End. Bal."

Requirement 5

• Trial Balance.

Requirement 6

Question 3: Prepare Gray Co.'s Balance Sheet as of January 31, 2009.

Requirement 7

Question 4: Compare your solutions for Requirements 1 through 6 to the "January" screen