Prepare a Trial Balance for Brandt Bed and Breakfast for December 31, 2020

Overview

The trial balance provides a snapshot of the financial position of Brandt Bed and Breakfast as of December 31, 2020.

Account Balances

To prepare a trial balance for Brandt Bed and Breakfast as of December 31, 2020, we will use the following account balances:


  1. Cash: $10,000
  2. Accounts Receivable: $5,000
  3. Supplies: $2,000
  4. Prepaid Insurance: $3,000
  5. Land: $50,000
  6. Building: $100,000
  7. Accumulated Depreciation - Building: $10,000
  8. Accounts Payable: $7,000
  9. Salaries Payable: $2,000
  10. Mortgage Payable: $80,000
  11. Owner's Capital: $100,000
  12. Owner's Drawings: $5,000
  13. Revenue: $20,000
  14. Rent Expense: $4,000
  15. Utilities Expense: $2,000
  16. Insurance Expense: $1,000
  17. Depreciation Expense: $1,000
  18. Salaries Expense: $3,000

Trial Balance

To prepare the trial balance, we need to list all the accounts and their respective debit or credit balances. Here's how the trial balance for Brandt Bed and Breakfast as of December 31, 2020 would look:


Debit Balances:
  • Cash: $10,000
  • Supplies: $2,000
  • Prepaid Insurance: $3,000
  • Land: $50,000
  • Building: $100,000
  • Accumulated Depreciation - Building: $10,000
  • Accounts Receivable: $5,000
  • Owner's Capital: $100,000
  • Revenue: $20,000
  • Rent Expense: $4,000
  • Utilities Expense: $2,000
  • Insurance Expense: $1,000
  • Depreciation Expense: $1,000
  • Salaries Expense: $3,000
Credit Balances:
  • Accounts Payable: $7,000
  • Salaries Payable: $2,000
  • Mortgage Payable: $80,000
  • Owner's Drawings: $5,000

The total debits should equal the total credits, indicating that the accounts have been properly balanced. The trial balance provides a snapshot of the financial position of Brandt Bed and Breakfast as of December 31, 2020.

What is the purpose of preparing a trial balance for a business like Brandt Bed and Breakfast? The purpose of preparing a trial balance for a business like Brandt Bed and Breakfast is to ensure that the total debits equal the total credits, indicating that the accounts have been properly balanced. It provides a snapshot of the financial position of the business at a specific point in time, in this case, as of December 31, 2020.
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