During the first month of operations, Martinson Services, Inc., completed the following transactions:
May...... 2...... Martinson Services received $65,000 cash and issued common stock to the stockholders.
3..... Purchased supplies, $600, and equipment, $11,700, on account.
4.... Performed services for a customer and received cash, $5,600.
7.... Paid cash to acquire land, $37,000.
11.... Performed services for a customer and billed the customer, $2,900.
Martinson expects to collect within one month.
16.... Paid for the equipment purchased May 3 on account.
17.... Paid for newspaper advertising, $610.
18.... Received partial payment from customer on account, $800.
22.... Received and paid the water and electricity bills, $440.
29.... Received $2,500 cash for servicing the heating unit of a customer.
31.... Paid employee salaries, $2,400.
31.... Declared and paid dividends of $2,000.
1. Record each transaction in the journal. Be sure to record the date in each entry. Explanations are not required.
2. Post the transactions to the T-accounts, using transaction dates as posting references. Label the ending balance of each account Bal, as shown in the chapter.
3. Prepare the trial balance of Martinson Services, Inc., at May 31 of the current year.
4. Adam Martinson, the manager, asks you how much in total resources the business has to work with, how much it owes, and whether May was profitable (and by how much).