Karleen’s Catering Service provides catered meals to individuals and businesses. Karleen’s purchases its food ready to serve from Mel’s Restaurant. In order to prepare a realistic trial balance, the events described below are aggregations of many individual events during 2011.
a. Common stock was issued for $22,000.
b. During the year, Karleen’s paid office rent of $13,500.
c. Utilities expenses incurred and paid were $5,320.
d. Wages of $58,800 were earned by employees and paid during the year.
e. During the year, Karleen’s provided catering services:
On credit ......... $128,200
For cash ........ 18,650
f. Karleen’s paid $59,110 for supplies purchased and used during the year.
g. Karleen’s paid dividends in the amount of $3,500.
h. Karleen’s collected accounts receivable in the amount of $109,400.
Required:
1. Analyze the events for their effect on the accounting equation.
2. Prepare journal entries.
3. Post the journal entries to ledger accounts.
4. Prepare a trial balance at December 31, 2011. Assume that all beginning account balances at January 1, 2011, are zero.