Question

The consulting firm of Martin and Associates uses the accounts listed below. On a separate sheet of paper, set up T accounts for each of the accounts listed and record the balances as of December 1, 20X1 on the normal balance side of the accounts.

Cash	$	5,400		Joan Martin, Capital	15,700
Accounts receivable		8,400		Joan Martin, Drawing	-0-
Prepaid rent		-0-		Fees income	-0-
Office equipment		7,900		Utilities expense	-0-
Accounts payable		6,000		Salaries expense	-0-

The firm has the following transactions during the month of December 20X1. Record the effects of these transactions in the T accounts.

1. Paid $1,400 for one month's rent.
2. Collected $5,200 in cash from credit customers.
3. Performed services for $7,400 in cash.
4. Paid $4,400 for salaries.
5. Issued a check for $3,400 to a creditor.
6. Performed services for $10,400 on credit.
7. Purchased office equipment for $1,400 on credit.
8. The owner withdrew $3,400 in cash for personal expenses.
9. Issued a check for $640 to pay the monthly utility bill.

1. Post the above transactions into the appropriate T accounts.
2. Using the information shown, prepare a trial balance for Martin and Associates at December 31, 20X1 before any adjusting entries are made.

Answer 1

Effects of these transaction in T accounts.

Cash

5,400	1,400 Adj. (a)
(b) Adjustment 5,200	4,400 Adj. (d)
(c) Adj. 7,400	3,400 Adj. (e)
	3,400 Adj. (h)
	640 Adj. (i)
Balance 4,760

Accounts Receivable

8,400	5,200 Adj. (b)
(f) Adj. 10,400
Balance 13,600

Office Equipment

7,900
(g) Adj. 1,400
Balance 9,300

Accounts payable

(e) Adj. 3,400	6,000
	1,400 Adj. (g)
	4,000 Balance

Owner's Capital

	15,700
	15,700 Balance

Service Revenue

	7,400 Adj. (c)
	10,400 Adj. (f)
	17,800 Balance

Rent expense

(a) Adj. 1,400
Balance 1,400

Salaries and wages expense

(d) Adj. 4,400
Balance 4,400

Owner's Drawings

(h) 3,400
Balance 3,400

Utility expense

(i) 640
Balance 640

MARTIN AND ASSOCIATES

Trial Balance

	Debit	Credit
Cash	$5,400
Accounts Receivable	8,400
Prepaid Rent	0
Office Equipment	7,900
Accounts Payable		$6,000
Owner's Capital		15,700
Owner's Drawings		0
Fees Income		0
Utilities Expense	0
Salaries	0
	$21,700	$21,700