Chapter 2, Problem 2.37BP

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

Trevor Moore opened a law office on April1, 2017. During the first month of operations, the business completed the following transactions:

Apr. 1    Moore contributed $76,000 cash to the business, Trevor Moore. Attorney. The business issued common stock to Moore.

3    Purchased office supplies, $400, and furniture, $2,200, on account.

4    Performed legal services for a client and received $900 cash.

7    Purchased a building with a market value of $120,000, and land with a market value of $29,000. The business paid $45,000 cash and signed a note payable to the bank for the remaining amount.

11	Prepared legal documents for a client on account, $800.
15	Paid assistant’s semimonthly salary, $1,230.
16	Paid for the office supplies purchased on April 3 on account.
18	Received $2,800 cash for helping a client sell real estate.
19	Defended a client in court and billed the client for $1,500.
25	Received a bill for utilities, $650. The bill will be paid next month.
28	Received cash on account, $1,700.
29	Paid $4,800 cash for a 12-month insurance policy starting on May 1.
29	Paid assistant’s semimonthly salary, $1,230.
30	Paid monthly rent expense, $1,100.
30	Paid cash dividends of $2,000.

Requirements

1. Record each transaction in the journal, using the following account titles: Cash ; Accounts Receivable; Office Supplies; Prepaid Insurance; Furniture; Building; Land; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.

2. Open the following four-column accounts including account numbers: Cash, 101; Accounts Receivable, 111; Office Supplies, 121; Prepaid Insurance, 131; Furniture, 141; Building, 151; Land, 161; Accounts Payable, 201; Utilities Payable, 211;

Notes Payable, 221; Common Stock, 301; Dividends, 311; Service Revenue, 411; Salaries Expense, 511; Rent Expense, 521; and Utilities Expense, 531.

3. Post the journal entries to four-column accounts in the ledger, using dares, account numbers, journal references, and posting references. Assume the journal entries were recorded on page 1 of the journal.

4. Prepare the trial balance of Trevor Moore, Attorney, at April 30, 2017.