Sweetwater Temporary Clerical Help Service opened for business in June
Sweetwater Temporary Clerical Help Service opened for business in June 2011. From the opening until the end of the year, Sweetwater engaged in the activities described below. So that a realistic trial balance can be prepared, the events described below are aggregations of many individual events.
a. Sold 10,000 shares of common stock for $4.50 per share
b. Purchased office equipment from Furniture Max Inc. for $18,710 cash
c. Received $112,880 from clients for services provided
d. Paid wages of $87,300
e. Borrowed $20,000 from the Bank of America on a three-year note payable
f. Paid office rent of $10,200
g. Purchased office supplies on credit for $2,120 from Office Supply Inc.
h. Paid $1,200 toward the payable established in transaction g
i. Paid utility charges incurred during the year of $3,250
Required:
1. Analyze the events for their effect on the accounting equation.
2. Prepare journal entries. (Note: Ignore the date because these events are aggregations of individual events.)
3. Post the journal entries to ledger accounts.
4. Prepare a trial balance at December 31, 2011.
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