Bill Ronalds started a catering service called Blue Ribbon Catering. During the first month of operations, January 2014, the business completed the following selected transactions:
a. Ronalds began the company with an investment of $50,000 cash and a van (automobile) valued at $26,000. The business gave Ronalds owner's equity in the business.
b. Paid $8,000 cash for food service equipment.
c. Purchased supplies on account, $14,800.
d. Paid employee salary, $12,600 cash.
e. Received $4,000 cash for a catering job.
f. Performed services at a wedding on account, $8,600.
g. Paid $12,000 cash as a partial payment for transaction c.
h. Received a $1,600 bill for advertising expense that will be paid in the near future.
i. Received cash on account, $2,200.
j. Paid the following cash expenses:
(1) Rent, $3,000.
(2) Insurance, $1,600.
k. Ronalds withdrew $12,000 cash for personal use.
Required
1. Record the transactions in the journal. Use the letters to identify the transactions.
2. Open the following three-column ledger accounts: Cash, #1100; Accounts Receivable, #1300; Supplies, #1500; Food Service Equipment, #1600; Automobile, #1700; Accounts Payable, #2100; B. Ronalds, Capital, #3100; B. Ronalds, Withdrawals, #3200; Service Revenue, #4100; Advertising Expense, #5100; Insurance Expense, #5500; Rent Expense, #5700; Salary Expense, #5800.
3. Post to the accounts and keep a running balance for each account.
4. Prepare the trial balance of Blue Ribbon Catering at January 31, 2014.