At the end of 2014, CNC Corporation's accounting information system produced the following trial balance: CNC completed the following transactions in January 2015: a.Purchased inventory on account, $300.
B.Collected cash from customers for prior year sales, $500.
C.Paid current month's wages, $900.
D.Had land appraised.Cost of doing the appraisal (paid in cash), $700.Appraised value of land, $3,000.
E.Sold inventory with a cost basis of $200 on account, $800.
F.Declared dividends, $50.
G.Hired additional sales staff.Expected monthly salaries, $80.
H.Purchased supplies for cash, $150.
i.Paid creditors for previous purchases, $150.
j.Signed a contract for annual employee retreat, $450.CNC uses block coding for its chart of accounts.The balance in account #101 at the end of January 2015 will be:
A)$5000 on the debit side.
B)$5000 on the credit side.
C)Some other amount on the debit side.
D)Some other amount on the credit side.

Question

At the end of 2014, CNC Corporation's accounting information system produced the following trial balance:  CNC completed the following transactions in January 2015: a.Purchased inventory on account, $300.
B.Collected cash from customers for prior year sales, $500.
C.Paid current month's wages, $900.
D.Had land appraised.Cost of doing the appraisal (paid in cash), $700.Appraised value of land, $3,000.
E.Sold inventory with a cost basis of $200 on account, $800.
F.Declared dividends, $50.
G.Hired additional sales staff.Expected monthly salaries, $80.
H.Purchased supplies for cash, $150.
i.Paid creditors for previous purchases, $150.
j.Signed a contract for annual employee retreat, $450.CNC uses block coding for its chart of accounts.The balance in account #101 at the end of January 2015 will be:
A)$5000 on the debit side. 
B)$5000 on the credit side. 
C)Some other amount on the debit side. 
D)Some other amount on the credit side.

Quizplus · Accepted Answer

We need to analyze each transaction and its impact on account #101. Account #101 is cash, which is a balance sheet account categorized under assets.

Transaction A: Purchased inventory on account, $300. No impact on account #101.
Transaction B: Collected cash from customers for prior year sales, $500. Increases cash (account #101) by $500.
Transaction C: Paid current month's wages, $900. Decreases cash (account #101) by $900.
Transaction D: Had land appraised. Cost of doing the appraisal (paid in cash), $700. No impact on account #101.
Transaction E: Sold inventory with a cost basis of $200 on account, $800. Increases accounts receivable (a balance sheet account categorized under assets) by $800 but no impact on account #101. 
Transaction F: Declared dividends, $50. Decreases cash (account #101) by $50.
Transaction G: Hired additional sales staff. Expected monthly salaries, $80. No impact on account #101.
Transaction H: Purchased supplies for cash, $150. Decreases cash (account #101) by $150.
Transaction I: Paid creditors for previous purchases, $150. Decreases accounts payable (a balance sheet account categorized under liabilities) by $150 but no impact on account #101.
Transaction J: Signed a contract for annual employee retreat, $450. No impact on account #101.

The total impact on account #101 is $500 - $900 - $50 - $150 = -$600 (credit balance). Therefore, the answer is (A) $5000 on the debit side.

At the End of 2014, CNC Corporation's Accounting Information System