Several years ago, Mary Emerson founded Emerson Consulting Inc., a consulting business specializing in financial planning for

Question:

Several years ago, Mary Emerson founded Emerson Consulting Inc., a consulting business specializing in financial planning for young professionals. The following captions and amounts summarize Emerson Consulting€™s at December 31, 2010, the beginning of the current year:

During January 2011, the following transactions occurred:
a. Sold common stock to a new stockholder in exchange for $12,000 cash
b. Performed advisory services for a client for $3,850 and received the full amount in cash
c. Received $925 on account from a client for whom services had been performed on credit
d. Purchased supplies for $1,140 on credit
e. Paid $875 on accounts payable
f. Performed advisory services for $2,980 on credit
g. Paid cash of $1,350 for secretarial services during January
h. Paid cash of $800 for January€™s office rent
i. Paid utilities used in January 2011 in the amount of $1,340
j. Paid a dividend of $500
Required:
1. Record the effects of the transactions listed above on the accounting equation for the business. Use the format given in the problem, starting with the totals at December 31, 2010.
2. Prepare the trial balance at January 31, 2011.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...