Chapter 2, Problem P2.31APGA

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance
Leaming Objectives 3, 4
3. Cash Balance $50,160
Terrence Murphy opened a law office on January 1, 2018. During the ?rst month of operations, the business completed the following transactions:

Jan. 1	Murphy contributed $78,000 cash to the business, Terrence Murphy, Attorney. The business gave capital to Murphy.
3	Purchased office supplies, $600, and furniture, $1,700, on account.
4	Performed legal services for a client and received $1,000 cash.
7	Purchased a building with a market value of $130,000, and land with a market value of $25,000. The business paid $25,000 cash and signed a note payable to the bank for the remaining amount.
11	Prepared legal documents for a client on account, $400.
15	Paid assistant’s semimonthly salary, $1,120.
16	Paid for the office supplies purchased on January 3 on account.
18	Received $2,700 cash for helping a client sell real estate.
19	Defended a client in court and billed the client for 51,800.
25	Received a bill for utilities, $600. The bill will be paid next month.
29	Received cash on account, $1,500.
30	Paid $1,200 cash for a 12-month insurance policy starting on February 1.
30	Paid assistant's semimonthly salary, $1,120.
31	Paid monthly rent expense, $1,800.
31	Murphy withdrew cash of $2,200.

Requirements
1. Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance, Land; Building; Furniture; Accounts Payable; Utilities Payable, Notes Payable; Murphy, Capital; Murphy, Withdrawals, 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; Land, 141; Building, 151; Furniture, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; Murphy, Capital, 301; Murphy, Withdrawals, 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 dates, account numbers, journal references; and posting references Assume thejournal entries were recorded on page 1 of the journal.
4. Prepare the trial balance of Terrence Murphy, Attorney, at January 31, 2018.