Vann Stubbs started Stubbs Carpet Installers, Inc., and during the first month of operations (December 2011) the business completed the following selected transactions:

a. Stubbs began the business with an investment of \($40,000\) cash and an automobile worth \($20,000\). The business gave Stubbs common stock worth $60,000.

b. Paid \($35,000\) for equipment.

c. Purchased supplies on account, $600.

d. Paid employee’s salary, $1,800.

e. Received \($900\) for a carpet installation job.

f. Received a \($300\) bill for advertising expense that will be paid in the near future.

g. Paid the account payable created in transaction (c).

h. Installed carpet for a hotel on account, $3,000.

i. Received cash on account, $1,100.

j. Paid the following cash expenses:

(1) Rent, $1,200.

(2) Insurance, $500.

k. Paid cash dividends of $2,200.

Requirements 

1. Open the following four-column accounts: Cash, Accounts receivable, Supplies, Equipment, Automobile, Accounts payable, Common stock, Dividends, Service revenue, Salary expense, Rent expense, Advertising expense, and Insurance expense.

2. Record the transactions in the journal. Use the letters to identify the transactions.

3. Post to the accounts and keep a running balance for each account.

4. Prepare the trial balance of Stubbs Carpet Installers at December 31, 2011.