Mulberry Services sells electronic data processing services to firms too small to own their own computing equipment. Mulberry had the following accounts and account balances as of January 1:

Accounts Payable$14,000Accounts Receivable130,000Cash6,000Common Stock114,000Interest Payable8,000Notes Payable (Long-term)80,000Prepaid Rent (Short-term)96,000Retained Earnings, January 116,000

During the year, the following transactions occurred (the events described below are aggregations of many individual events):

a.During the year, Mulberry sold $690,000 of computing services, all on credit.b.Mulberry collected $570,000 from the credit sales in Transaction a and an additional $129,000 from the accounts receivable outstanding at the beginning of the year.c.Mulberry paid the interest payable of $8,000.d.Wages of $379,000 were paid in cash.e.Repairs and maintenance of $9,000 were incurred and paid.f.The prepaid rent at the beginning of the year was used during the year. In addition, $28,000 of computer rental costs were incurred and paid. There is no prepaid rent or rent payable at year-end.g.Mulberry purchased computer paper for $13,000 cash in late December. None of the paper was used by year-end.h.Advertising expense of $26,000 was incurred and paid.i.Income tax of $10,300 was incurred and paid during the year.j.Interest of $5,000 was paid on the long-term loan.Required:1.Establish a ledger for the accounts listed above and enter the beginning balances.2.Analyze each transaction. Journalize as appropriate.3.Post your journal entries to T-accounts. Add additional T-accounts when needed.4.Use the ending balances in the T-accounts to prepare a trial balance.

CHART OF ACCOUNTSMulberry ServicesGeneral LedgerASSETS111Cash121Accounts Receivable122Notes Receivable123Supplies124Prepaid Insurance125Prepaid Rent126Inventory131Land132Buildings133Equipment134Furniture135Trucks139Accumulated DepreciationLIABILITIES211Accounts Payable212Notes Payable213Income Taxes Payable214Wages Payable215Utilities Payable216Insurance Payable217Interest Payable218Rent Payable219Unearned Service Revenue231Bonds PayableEQUITY311Common Stock321Retained Earnings331Dividends

2. Prepare journal entries for the transactions of Mulberry Services. Assume the transactions were posted on December 31.

4. Use the ending balances in the T-accounts to prepare a trial balance.

Mulberry Services

ADJUSTED TRIAL BALANCE

December 31, 20--

ACCOUNT TITLEDEBITCREDIT1Cash2Accounts Receivable3Supplies4Accounts Payable5Notes Payable6Common Stock7Retained Earnings8Service Revenue9Rent Expense10Advertising Expense11Wages Expense12Repairs and Maintenance Expense13Interest Expense14Income Taxes Expense15Totals