Question

Ashley Somers owns San Diego Art Company, a firm providing designs for advertisers, market analysts, and others. On July 1, the business's general ledger showed the following normal account balances: Cash $10,900 Accounts Payable $2,400 Accounts Receivable 10,200 Notes Payable 5,400 Common Stock 10,900 Retained Earnings 2,400 Total Assets $21,100 Total Liabilities and Stockholders' Equity $21,100 The following transactions occurred during the month of July: July 1 Paid July rent, $1,070. 2 Collected $8,500 on account from customers. 3 Paid $2,900 installment due on the $5,400 noninterest-bearing note payable. 4 Billed customers for design services rendered on account, $19,950. 5 Rendered design services and collected from cash customers, $1,600. 6 Paid $2,100 to creditors on account. 7 Collected $15,150 on account from customers. 8 Paid a delivery service for delivery of graphics to commercial firms, $800. 9 Paid July salaries, $5,000. 10 Received invoice for July advertising expense, to be paid in August, $1,000. 11 Paid utilities for July, $750. 12 The business paid a $2,400 cash dividend. 13 Received invoice for supplies used in July, to be paid in August, $2,660. 14 Purchased computer for $4,700 cash to be used in business starting next month. Required: a. Set up accounts for the general ledger accounts with July 1 balances and enter the beginning balances. Also provide the following accounts: Equipment; Dividends; Service Fees Earned; Rent Expense; Salaries Expense; Delivery Expense; Advertising Expense; Utilities Expense; and Supplies Expense. Prepare journal entries and record the listed transactions in the appropriate T-accounts. General Journal Date Description Debit Credit (1) Answer Answer Answer Answer Answer Answer To record payment of rent expense. (2) Answer Answer Answer Answer Answer Answer To record collections from customers. (3) Answer Answer Answer Answer Answer Answer To record payment of notes payable. (4) Answer Answer Answer Answer Answer Answer To record customer billings. (5) Answer Answer Answer Answer Answer Answer To record service fees rendered and collected. (6) Answer Answer Answer Answer Answer Answer To record payments to creditors. (7) Answer Answer Answer Answer Answer Answer To record collections from customers. (8) Answer Answer Answer Answer Answer Answer To record payment of delivery expense. (9) Answer Answer Answer Answer Answer Answer To record salaries expense. (10) Answer Answer Answer Answer Answer Answer To record advertising expense to be paid following month. (11) Answer Answer Answer Answer Answer Answer To record payment of utilities expense. (12) Answer Answer Answer Answer Answer Answer To record payment of dividends. (13) Answer Answer Answer Answer Answer Answer To record supplies expense for the month. (14) Answer Answer Answer Answer Answer Answer To record purchase of computer. Cash Beg Bal Answer Answer (1) Answer Answer (2) Answer Answer (3) Answer Answer (5) Answer Answer (6) Answer Answer (7) Answer Answer (8) Answer Answer (9) Answer Answer (11) Answer Answer (12) Answer Answer (14) Answer Answer Bal Answer Answer Accounts Receivable Beg Answer Answer (2) Answer Answer (4) Answer Answer (7) Answer Answer Bal Answer Answer Equipment (14) Answer Answer Bal Answer Answer Notes Payable Beg Answer Answer (3) Answer Answer Bal Answer Answer Accounts Payable Beg Answer Answer (6) Answer Answer (10) Answer Answer (13) Answer Answer Bal Answer Answer Common Stock Beg Answer Answer Bal Answer Answer Retained Earnings Beg Answer Answer Bal Answer Answer Dividends (12) Answer Answer Bal Answer Answer Service Fees Earned (4) Answer Answer (5) Answer Answer Bal Answer Answer Rent Expense (1) Answer Answer Bal Answer Answer Salaries Expense (9) Answer Answer Bal Answer Answer Delivery Expense (8) Answer Answer Bal Answer Answer Advertising Expense (10) Answer Answer Bal Answer Answer Utilities Expense (11) Answer Answer Bal Answer Answer Supplies Expense (13) Answer Answer Bal Answer Answer b. Prepare a trial balance as of July 31. SAN DIEGO ART COMPANY Trial Balance July 31 Debit Credit Cash $Answer $Answer Accounts Receivable Answer Answer Equipment Answer Answer Accounts Payable Answer Answer Notes Payable Answer Answer Common Stock Answer Answer Retained Earnings Answer Answer Dividends Answer Answer Service Fees Earned Answer Answer Rent Expense Answer Answer Salaries Expense Answer Answer Delivery Expense Answer Answer Advertising Expense Answer Answer Utilities Expense Answer Answer Supplies Expense Answer Answer Totals $Answer $Answer

Answer 1

Trial Balance
	Dr	Cr
Cash	$16,430
Accounts receivable	6500
Computer	4700
Accounts payable		3960
Notes payable		2500
Common stock		10900
Retained eranings		2400
Dividends	2400
Service revenue eraned		21550
Rent expenses	1070
Delivery expenses	800
Saalries expenses	5000
Advertsing expenses	1000
Utilities expenses	750
Supplies expenses	2660
Total	$41,310	$41,310