On December 1, a group of individuals formed a corporation to establish the Local, a neighborhood weekly newspaper featuring want ads of individuals and advertising of local firms. The free paper will be mailed to about 8,000 local residents; revenue will be generated from advertising and want ads. The December transactions are summarized as follows:

1 Sold common stock of Beeper, Inc., for cash, \(\$ 40,000\).

2 Paid December rent on furnished office, \(\$ 1,200\).

3 Purchased for \(\$ 750\), on account, T-shirts displaying company logo. The T-shirts were distributed at a grand opening.

4 Paid to creditor on account, \(\$ 750\).

5 Collected "Help wanted" ad revenue in cash, \(\$ 5,000\).

6 Paid post office for cost of bulk mailing, \(\$ 910\).

7 Billed various firms for advertising in the first two issues of the newspaper, \(\$ 5,600\).

8 Paid Acme Courier Service for transporting newspapers to post office, \(\$ 50\).

9 Paid for printing newspaper, \(\$ 2,900\).

10 Collected "Help wanted" ad revenue in cash, \(\$ 2,570\).

11 Received invoice for December utilities, to be paid in January, \(\$ 890\).

12 Paid for printing newspaper, \(\$ 2,900\).

13 Paid December salaries, \(\$ 4,100\).

14 Billed various firms for advertising in two issues of the newspaper, \(\$ 8,850\).

15 Paid post office for cost of bulk mailing, \(\$ 775\).

16 Paid Acme Courier Service for transporting newspapers to post office, \(\$ 350\).

17 Collected \(\$ 5,100\) on accounts receivable.

18 Purchased a printer for office in exchange for a six-month note payable, \(\$ 1,400\).

Required

a. Set up accounts for the following items: Cash, Accounts Receivable, Office Equipment, Accounts Payable, Notes Payable, Common Stock, Advertising Revenue, Want Ad Revenue, Printing Expense, Advertising Expense, Utilities Expense, Salaries Expense, Rent Expense, and Delivery Expense. Prepare journal entries in a general journal and record the foregoing transactions in the accounts.

b. Prepare a trial balance as of December 31 .

c. Prepare an income statement for the month of December.

d. Prepare a balance sheet as of December 31. (Note: In this problem, the net income for December becomes the amount of retained earnings at December 31.)