If the debit and credit columns of the trial balance are in balance, does this mean that no errors…

As of January 1, 2003, Kendrick Corporation had the following balances in its general ledger:

Debits

Credits

Cash

$31,500

Accounts Receivable

23,500

Inventory

92,000

Office Building . .

208,000

Accounts Payable.

$16,500

Mortgage Payable

180,000

Notes Payable . .

68,500

Capital Stock

57,500

Retained Earnings

32,500

Totals

$355,000

$355,000

Kendrick had the following transactions during 2003. All expenses were paid in cash, unless otherwise stated.

a. Accounts Payable as of January 1, 2003, were paid off.

b. Purchased inventory for $35,000 cash.

c. Collected $21,000 of receivables.

d. Sold $185,000 of merchandise, 85% for cash and 15% for credit. The Cost of Goods Sold was $98,500.

e. Paid $25,000 mortgage payment, of which $15,000 represents interest expense.

f. Paid salaries expense of $60,000.

g. Paid utilities of $6,300.

h. Paid installment of $5,000 on note.

1. Prepare journal entries to record each listed transaction. (Omit explanations.)

2. Set up T-accounts with the proper account balances at January 1, 2003, post the journal entries to the T-accounts, and prepare a trial balance for Kendrick Corporation at December 31, 2003.

3. Interpretive Question: If the debit and credit columns of the trial balance are in balance, does this mean that no errors have been made in journalizing the transactions? Explain.

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