Set up the following accounts (use the balance column format): Cash (101); Office Supplies (124); Prepaid Rent (131); Photography Equipment (167); Joseph Eetok, Capital (301); Photography Fees Earned (401); and Utilities Expense (690). Then, using your General Journal entries from Exercise 2-12, post to the ledger. Finally, prepare the August 31, 2014, trial balance.
In exercise 2-12
Aug. 1 Joseph Eetok, the owner, invested $20,000 cash and photography equipment with a fair value of $42,000.
1 Rented a studio, paying $12,000 for the next three months in advance.
5 Purchased office supplies for $1,800 cash.
20 Received $9,200 in photography fees.
31 Paid $1,400 for August utilities.
Analysis Component: Joseph Eetok wanted to buy a building for his business and took the August A1, 2014, trial balance to his bank manager. Is the trial balance used for external reporting? Explain.