Trevor Moore opened a law office on January 1, 2015. During the first month of operations, the business completed the

Question:

Trevor Moore opened a law office on January 1, 2015. During the first month of operations, the business completed the following transactions:

Jan. 1 Moore contributed $ 59,000 cash to the business, Trevor Moore, Attorney. The business issued Common Stock to Moore.

3 Purchased office supplies, $ 600, and furniture, $ 2,000, on account.

4 Performed legal services for a client and received $ 1,300 cash.

7 Purchased a building, $ 100,000, and land, $ 20,000. The business paid $ 40,000 cash and signed a note payable to the bank for the remaining amount.

11 Prepared legal documents for a client on account, $ 700.

15 Paid assistant’s semimonthly salary, $ 1,180.

16 Paid for the office supplies purchased on January 3 on account.

18 Received $ 2,400 cash for helping a client sell real estate.

19 Defended a client in court and billed the client for $ 800.

25 Received a bill for utilities, $ 400. The bill will be paid next month.

29 Received cash on account, $ 700.

30 Paid $ 2,400 cash for a 12-month insurance policy starting on February 1.

30 Paid assistant’s semimonthly salary, $ 1,180.

31 Paid monthly rent expense, $ 1,500.

31 Paid cash dividends of $ 2,400.


Requirements

1. Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Furniture; Building; Land; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; 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; Furniture, 141; Building, 151; Land, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; Common Stock, 301; Dividends, 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 the journal entries were recorded on page 1 of the journal.

4. Prepare the trial balance of Trevor Moore, Attorney, at January 31, 2015.


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...

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Related Book For  answer-question

Horngrens Financial and Managerial Accounting

ISBN: 978-0133255584

4th Edition

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

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Question Posted: January 16, 2015 08:40:09