Pam Black owns Artsy Graphics, a firm providing designs for advertisers and market analysts. On July 1, the business's general ledger showed the following normal account balances:

The following transactions occurred during the month of July:

1 Paid July rent, \(\$ 510\).

2 Collected \(\$ 7,100\) on account from customers.

3 Paid \(\$ 1,800\) installment due on the \(\$ 3,300\) noninterest-bearing note payable.

4 Billed customers for design services rendered on account, \(\$ 18,100\).

5 Rendered design services and collected from cash customers, \(\$ 1,200\).

6 Paid \(\$ 1,400\) to creditors on account.

7 Collected \(\$ 12,750\) on account from customers.

8 Paid a delivery service for delivery of graphics to commercial firms, \(\$ 650\).

9 Paid July salaries, \(\$ 5,300\).

10 Received invoice for July advertising expense, to be paid in August, \(\$ 600\).

11 Paid utilities for July, \(\$ 250\).

12 Paid stockholders a dividend of \(\$ 2,000\) cash.

13 Received invoice for supplies used in July, to be paid in August, \(\$ 2,260\).

14 Purchased computer for \(\$ 7,000\) cash to be used in the business starting next month.

Required

a. Set up accounts for the general ledger accounts with July 1 balances and enter the beginning balances. Also provide the following accounts: Equipment; Service Fees Earned; Rent Expense; Salaries Expense; Delivery Expense; Advertising Expense; Utilities Expense; Supplies Expense; and Dividends. Prepare journal entries and record the listed transactions in the appropriate T-accounts.

b. Prepare a trial balance as of July 31 .

Transcribed Image Text:

Cash.... $ 6,800 Accounts payable.. $ 2,100 Accounts receivable.. 10,700 Notes payable.... 4,200 Common stock.. 2,000 Retained earnings 9,200 Total Assets $17,500 Total Liabilities and Stockholders' Equity..... $17,500