Milo Clothing experienced the following events during Year 1, its first year of operation: Acquired $11,500 cash from the issue of common stock. Purchased inventory for $5,500 cash. Sold inventory costing $3,300 for $5,610 cash. Paid $900 for advertising expense. Required a. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits.

Trial balance:      Debit  17110     =   17110        Credits

Explanation:

Milo clothing

Journal entry

1. Dr Cash 11500

                 Cr Capital- Milo clothing  11500

(Issue of shares)

2. Dr Inventory 5500

                         Cr Cash  5500

               (Purchase inventory on cash)

3.a) Dr Cost of goods sold 3300

               Cr Inventory                3300

 b) Dr Account receivable  5610

                               Cr Sales revenue 5610

             (Sale of inventory)

4. Dr Advertising expense  900

                               Cr Cash 900

( Paid for advertising)

T-account

Cash                                                                        Capital - Milo clothing

DrCr__                                         __ DR CR

11500 ---    5500                                                                         --- 11500

          ---  900

Inventory                                                                 Account receivable

DrCr__                                     DR Cr

5500---3300                                                          5610 ---

Cost of goods sold                                                   Sales revenue

Dr Cr__                                   __ Dr Cr

3300 --                                                                                  --- 5610

Advertising expense

DrCr_

900 ---

Trial Balance

Cash           5100                              --                      11500 Capital-Milo clothing

Account receivable 5610               ---                   5610  Sales revenue

Cost of goods sold 3300               ---                        

Advertising expense 900

Inventory  2200

Total Debits      17110                       =                     17110 Total credits                                                                

answer; ///pegged exchange rate with the united states;