Assume you are the owner of The University Shopper, which specializes in items of special interest to university students. You opened your doors for business on September 1, 2017. The following transactions occurred during the first month of operations. 

a. Contributed $5,000 cash to the company in exchange for shares

b. Paid $1,000 to run a television advertisement this month

c. Received $5,000 cash from photocopier rentals

d. Received $2,500 from a university student council as a deposit for a large order of items to be delivered for Christmas

e. Purchased sales equipment, paying $10,000 cash

f. Paid $5,000 in cash for renting the space on campus this month

g. Paid yourself $5,000 in wages for work done during the month

h. Sold goods totaling $10,000 for the month; received cash of $5,000 and the rest is due from customers (friends)

i. Began to prepare for the large Christmas order by purchasing inventory on account for $6,000 

j. Prepaid next month’s rental charge of $5,000 k. Received $1,000 from customers on accounts receivable 

Required: 

1. Set up appropriate T-accounts. All accounts begin with zero balances. 

2. Record in the T-accounts the effects of each transaction for The University Shopper in September, referencing each transaction in the accounts with the transaction letter. Show the unadjusted ending balances in the T-accounts. 

3. Prepare an unadjusted trial balance for the end of September 2017. 

4. Refer to the revenues and expenses shown on the unadjusted trial balance and write a short memo to your parents, who loaned you the money to start the company, offering your opinion on the results of operations during the first month of business.