Chapter 2, Problem 2.28BE

(Learning Objective 3: Analyze the impact of business transactions on accounts) Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture, Accounts Payable, Common Stock. Dividends, Service Revenue, Salary Expense, and Rent Expense. Record the following transactions directly in the T-accounts without using a journal. Use the letters to identify the transactions. Determine the ending balance in each account.

1. a. Michael Dover opened a law firm by investing $23,500 cash and office furniture with a fair value of $8,600. Organized as a professional corporation, the business issued common stock to Dover.
2. b. Paid monthly rent of 31,100.
3. c. Purchased office supplies on account, $800
4. d. Paid employee salaries of $2,800.
5. e. Paid $200 of the account payable created in transaction c.
6. f. Performed legal service on account, $10,700.
7. g. Declared and paid dividends of $2,900.