Benito Mendez opened Mendez Appraisals. He rented office space and has a part-time secretary to answer the telephone and make appraisal appointments. His chart of accounts is as follows:

Mendez’s transactions for the first month of business are as follows:

May 1 Mendez invested cash in the business, $5,000.

2 Paid rent, $500.

3 Purchased office supplies, $100.

4 Purchased office equipment on account, $2,000.

5 Received cash for services rendered, $280.

8 Paid telephone bill, $38.

9 Paid electric bill, $42.

10 Received cash for services rendered, $310.

13 Paid part-time employee, $500.

14 Paid car rental for out-of-town trip, $200.

15 Paid for newspaper ad, $30.

18 Received cash for services rendered, $620.

19 Paid mileage reimbursement for part-time employee’s use of personal car for business deliveries (transportation expense), $22.

21 Mendez withdrew cash for personal use, $50.

23 Made payment on account for office equipment purchased earlier, $200.

24 Earned appraisal fee, which will be paid in a week, $500.

26 Paid for newspaper ad, $30.

27 Paid for local softball team sponsorship (miscellaneous expense), $15.

28 Paid part-time employee, $500.

29 Received cash on account, $250.

30 Received cash for services rendered, $280.

31 Paid cab fare (transportation expense), $13.

REQUIRED

1. Set up general ledger accounts from the chart of accounts.

2. Journalize the transactions for May in a two-column general journal. Use the following journal page numbers: May 1–10, page 1; May 13–24, page 2; May 26–31, page 3.

3. Post the transactions to the general ledger.

4. Prepare a trial balance.

5. Prepare an income statement and a statement of owner’s equity for the month of May, and a balance sheet as of May 31, 20--.

Transcribed Image Text:

Chart of Accounts Revenues Assets 101 Cash 122 Accounts Receivable 401 Appraisal Fees 142 Office Supplies 181 Office Equipment Expenses 511 Wages Expense 512 Advertising Expense 521 Rent Expense 525 Telephone Expense 526 Transportation Expense 533 Electricity Expense 549 Miscellaneous Expense Liabilities 202 Accounts Payable Owner's Equity 311 Benito Mendez, Capital 312 Benito Mendez, Drawing