To answer this question, we need to understand the impact of each transaction on the accounts of Corona Ltd. Here's how each transaction would affect the accounts:

1. Damaged inventory purchased on credit at a cost of $19,300 was returned to supplier. This would decrease both Inventory and Accounts Payable by $19,300.

2. Wages totalling $21,200 were paid for the period. This would decrease Cash by $21,200 and decrease Wages Expense (an equity account) by the same amount.

3. Paid $39,500 to credit suppliers. This would decrease Cash by $39,500 and decrease Accounts Payable by the same amount.

4. Inventory worth $19,300 is bought on account. This would increase Inventory by $19,300 and increase Accounts Payable by the same amount.

5. Machinery is purchased for $78,200 on cash. This would decrease Cash by $78,200 and increase Machinery by the same amount.

6. Provided services for $50,200 cash. This would increase Cash by $50,200 and increase Service Revenue (an equity account) by the same amount.

7. Borrowed $68,800 cash from the bank. This would increase Cash by $68,800 and increase Loan Payable by the same amount.

Now, let's update the opening balances with these changes:

Account name | Opening balance ($) | Changes ($) | Closing balance ($)
--- | --- | --- | ---
Cash | 251,000 | -78,200 (Machinery) -21,200 (Wages) -39,500 (Paid to suppliers) +50,200 (Services) +68,800 (Loan) | 231,100
Inventory | 58,000 | -19,300 (Returned) +19,300 (Bought) | 58,000
Machinery | 142,000 | +78,200 (Purchased) | 220,200
Accounts payable | 82,200 | -19,300 (Returned) -39,500 (Paid to suppliers) +19,300 (Bought) | 42,700
Loan payable | 75,000 | +68,800 (Borrowed) | 143,800
Share capital | 293,800 | No change | 293,800
Wages Expense | 0 | +21,200 (Paid) | 21,200
Service Revenue | 0 | +50,200 (Earned) | 50,200

The trial balance would then list all these closing balances. The total of debit balances should equal the total of credit balances to ensure the accounts are balanced.

Question

To answer this question, we need to understand the impact of each transaction on the accounts of Corona Ltd. Here's how each transaction would affect the accounts:

1. Damaged inventory purchased on credit at a cost of $19,300 was returned to supplier. This would decrease both Inventory and Accounts Payable by $19,300.

2. Wages totalling $21,200 were paid for the period. This would decrease Cash by $21,200 and decrease Wages Expense (an equity account) by the same amount.

3. Paid $39,500 to credit suppliers. This would decrease Cash by $39,500 and decrease Accounts Payable by the same amount.

4. Inventory worth $19,300 is bought on account. This would increase Inventory by $19,300 and increase Accounts Payable by the same amount.

5. Machinery is purchased for $78,200 on cash. This would decrease Cash by $78,200 and increase Machinery by the same amount.

6. Provided services for $50,200 cash. This would increase Cash by $50,200 and increase Service Revenue (an equity account) by the same amount.

7. Borrowed $68,800 cash from the bank. This would increase Cash by $68,800 and increase Loan Payable by the same amount.

Now, let's update the opening balances with these changes:

Account name | Opening balance ($) | Changes ($) | Closing balance ($)
--- | --- | --- | ---
Cash | 251,000 | -78,200 (Machinery) -21,200 (Wages) -39,500 (Paid to suppliers) +50,200 (Services) +68,800 (Loan) | 231,100
Inventory | 58,000 | -19,300 (Returned) +19,300 (Bought) | 58,000
Machinery | 142,000 | +78,200 (Purchased) | 220,200
Accounts payable | 82,200 | -19,300 (Returned) -39,500 (Paid to suppliers) +19,300 (Bought) | 42,700
Loan payable | 75,000 | +68,800 (Borrowed) | 143,800
Share capital | 293,800 | No change | 293,800
Wages Expense | 0 | +21,200 (Paid) | 21,200
Service Revenue | 0 | +50,200 (Earned) | 50,200

The trial balance would then list all these closing balances. The total of debit balances should equal the total of credit balances to ensure the accounts are balanced.

Knowee AI · Accepted Answer