Question

On July 31, 2022, the general ledger of Sunland Legal Services Inc. showed the following balances: Cash $3,520, Accounts Receivable $1,320, Supplies $440, Equipment $4,400, Accounts Payable $3,610, Common Stock $3,080, and Retained Earnings $2,990. During August, the following transactions occurred.

Aug. 3		Collected $1,060 of accounts receivable due from customers.
5		Received $1,140 cash for issuing common stock to new investors.
6		Paid $2,380 cash on accounts payable.
7		Performed legal services of $5,720, of which $2,640 was collected in cash and the remainder was due on account.
12		Purchased additional equipment for $1,060, paying $350 in cash and the balance on account.
14		Paid salaries $3,080, rent $790, and advertising expenses $240 for the month of August.
18		Collected the balance for the services performed on August 7.
20		Paid cash dividend of $440 to stockholders.
24		Billed a client $880 for legal services performed.
26		Received $1,760 from Laurentian Bank; the money was borrowed on a bank note payable that is due in 6 months.
27		Agreed to perform legal services for a client in September for $3,960. The client will pay the amount owing after the services have been performed.
28		Received the utility bill for the month of August in the amount of $240; it is not due until September 15.
31		Paid income tax for the month $440.

a. Using T-accounts, enter the beginning balances to the ledger.

b. Journalize the August transactions

c. Post the August journal entries to the ledger

d. Prepare a trial balance on August 31, 2022.

Answer 1

a& b) General Journal

Date	Account Title and Explanation	Debit	Credit
Aug.03	Cash	$1,060
	Accounts Receivable		$1,060
Aug.05	Cash	$1,140
	Common Stock		$1,140
Aug.06	Accounts Payable	$2,380
	Cash		$2,380
Aug.07	Cash	$2,640
	Accounts Receivable	$3,080
	Service Revenue		$5,720
Aug.12	Equipment	$1,060
	Cash		$350
	Accounts Payable		$710
Aug.14	Salaries Expenses	$3,080
	Rent Expense	$790
	Advertising Expense	$240
	Cash		$4,110
Aug.18	Cash	$3,080
	Accounts Receivable		$3,080
Aug.20	Dividend	$440
	Cash		$440
Aug.24	Accounts Receivable	$880
	Service Revenue		$880
Aug.26	Cash	$1,760
	Notes Payable		$1,760
Aug.27	No Entry
Aug.28	Utilities Expenses	$240
	Utilities Expenses Payable		$240
Aug.31	Income Tax Expenses	$440
	Cash		$440

c) Cash

July.31	$3,520	Aug.06	$2,380
Aug.3	$1,060	Aug.12	$350
Aug.5	$1,140	Aug.14	$4,110
Aug.07	$2,640	Aug.20	$440
Aug.18	$3,080	Aug.31	$440
Aug.26	$1,760
Aug.31	$5,480

Accounts Receivable

July.31	$1,320	Aug.3	$1,060
Aug.07	$3,080	Aug.18	$3,080
Aug.24	$880
Aug.31	$1,140

: Supplies Expenses

July.31	$440
Aug.31	$440

Equipment

July.31	$4,400
Aug.12	$1,060
End.Bal	$5,460

Accounts Payable

		July.31	$3,610
Aug.06	$2,380	Aug.12	$710
Aug.31	$1,940

Notes Payable

Aug.26	$1,760
Aug.31			$1,760

Common Stock

		July.31	$3,080
		Aug.05	$1,140
		Aug.31	$4,220

Retained Earnings

		July.31	$2,990
		Aug.31	$2,990

Dividend

		July.31	$0
		Aug.20	$440
		Aug.31	$440

Service Revenue

		Aug.07	$5,720
		Aug.24	$880
		Aug.31	$6,600

Salaries Expenses

		Aug.14	$3,080
Aug.31	$3,080

Rent Expense

		Aug.14	$790
Aug.31	$790

Advertising

		Aug.14	$240
Aug.31	$240

Utilities Expenses

Aug.28	$240	Sep.15	$240
Aug.31	$0

Income Tax Expenses

Aug.31	$440
Aug.31	$440

d) Sunland Legal Service Inc Trail Balance As on Aug.31.2022

Cash	$5,480
Accounts Receivable	$1,140
Supplies	$440
Equipment	$5,460
Accounts Receivable		$1,940
Notes Payable		$1,760
Common Stock		$4,220
Retained Earnings		$2,990
Dividend	$440
Service Revenue		$6,600
Salaries Expenses	$3,080
Rent Expense	$790
Advertising Expense	$240
Utilities	$0
Income Tax Expenses	$440
Total	$17,510	$17,510