posting & trial bal

Transaction Initial Investment: 

Transaction Initial Investment Mr. John Lerry Martinez decided to organize his car wash business. He invested P250,000 into this entity. Analysis : Assets increased. Equity Increased. Rules : Increases in Assets are debited. Increases in Equity are credited. Entry : Increase in asset is debited to cash.Increase in Equity is credited to Martinez, Capital.

Assuming that after the occurrence of several transactions, the ledger accounts appeared as follows...: 

Assuming that after the occurrence of several transactions, the ledger accounts appeared as follows...

PowerPoint Presentation: 

After posting the transactions, the balances of the ledger accounts must be determined. The balances will be used in preparing a trial balance.

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The following procedures and guidelines must be remembered in determining the account balances.

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Add the debits and write the sum in superscript.

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Add the credits and write the sum in superscript.

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Then determine if the account has a debit balance or credit balance. In this case, because the total debits is more than the total credits, the Cash account has a debit balance . Double rule the balance.

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All ledger balances must be determined. The ledger balances of each account will be as follows:

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There is no need to write the total credit (or debit) of an account if there is only one credit (or debit). There is also no need to write the total of debits (or credits) in superscript if there is no credit (or debit).

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After determining the account balances, a trial balance will be prepared.

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Because Cash has a debit balance it is placed in the debit column of the trial balance. Accounts with credit balances must be placed on the credit column of the trial balance. The total debits must equal the total credits. Double rule the totals.

A little bit of caution...: 

A little bit of caution... The equality of total debits and total credits in the trial balance does not guarantee the absence of errors.

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The financial statements can now be prepared using the amounts in the trial balance.

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The Capital account balance is computed as follows: Beginning capital P 25,500 Net Loss ( 7,350) Ending capital P 18,150