P3-13B. Transaction Analysis, Trial Balance, and Financial Statements On December 1, a group of in- L03, 4, 5, 6 dividuals formed a corporation to establish the Arcadia News, a neighborhood newspaper featuring "Help wanted" ads by individuals and advertising by local firms. The free paper will be mailed to about 20,000 local residents; revenue will be generated from advertising and the want ads. The De- cember transactions are summarized below: MBC Chapter 3 Accrual Basis of Accounting Dec. Sold common stock for cash, $60,000. 2 Paid December rent on furnished office, $5,000 3 Purchased for $550, on account, T-shirts displaying company logo. The T-shirts were distributed at a grand opening. 4 Paid to creditor on account, $350. 5 Collected want ad revenue in cash, $2,800. 6 Paid post office for cost of bulk mailing, $710. 7 Billed various firms for advertising in the first two issues of the newspaper, $6,300. 8 Paid Tucson Courier Service for transporting newspapers to the post office, $70 9 Paid for printing newspaper, $3,900 10 Collected want ad revenue in c 11 Received invoice for December utilities, to be paid in January, $510 12 Paid for printing newspaper, $4,900. 13 Paid December salaries, $6,100. 14 Billed various firms for advertising in two issues of the newspaper, $8,950. 15 Paid post office for cost of bulk mailing, $630. 16 Paid Tucson Courier Service for transporting newspapers to the post office, $60. 17 Collected $5,100 on accounts receivable. 18 Purchased fax machine for the office in exchange for a six-month note payable, $3,100. Required Set up accounts for the following: Cash, Accounts Receivable, Office Equipment, Accounts Pay able, 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. Prepare a trial balance as of December 31 Prepare an income statement for the month of December. 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.) a. b. c. d