Chapter 7

Problem 4: Unadjusted Trial Balance

George Handyman Services had the following account balances as of December 31, 20x1:

Accounts payable 32, 000

Accounts receivable 320, 000
Accumulated depreciation 400, 000
Building 500, 000
Cash 970, 000
Interest expense 96, 000
Land 700, 000
Notes payable 800, 000
Owner’s equity 920, 000
Prepaid rent 50, 000
Salaries expense 240, 000
Service fees 796, 000
Utilities expense 72, 000

Requirement: Prepare the unadjusted trial balance. Make sure you provide a proper heading for the
report and present the accounts in their correct sequence.

Solution:
George Handyman Services
Unadjusted Trial Balance
December 31, 20x1

Accounts Debit Credit

Cash 970, 000

Accounts payable 320, 000

Prepaid rent 50, 000

Land 700, 000

Building 500, 000

Accumulated depreciation 400, 000

Accounts payable 32, 000

Notes payable 800, 000

Owner’s equity 920, 000

Service fees 796, 000

Salaries expense 240, 000

Utilities expense 72, 000

Interest expense 96, 000

Totals 2, 948, 000 2, 948, 000