Problem $2-72$B

Comprehensive Problem

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 $1,2022$ :

During $2022,$ the following transactions occurred $($the events described below are aggregations of many individual events$)$:

a$.$ During $2022,$ 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 in $2022.$ 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 in $2022.$

j$.$ Interest of $$5,000$ was paid on the long$-$term loan.

Required: Required:

Question Content Area

$1.$ Establish T$-$accounts for the accounts listed above and enter the beginning balances. Use a chart of accounts to order the T$-$accounts.

$3.$ Post your journal entries to the T$-$accounts. If a balance is zero, enter zero $("0").$