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Transaction Analysis and Trial Balance Make T-accounts for the following accounts that appear in the general ledger of Daniel Kelly, an attorney: Cash; Accounts Receivable; Office Equipment; Legal Database Subscription; Accounts Payable; Common Stock; Dividends; Legal Fees Earned; Salaries Expense; Rent Expense; and Utilities Expense. Using the accounting equation, record each of the transactions in a columnar format. Prepare journal entries and record the following October transactions in the T-accounts and key all entries with the number identifying the transaction. Determine the balance in each account and prepare a trial balance sheet as of October 31. Oct. 1 Kelly started his law practice by contributing $21,000 cash to the business on October 1, receiving shares of common stock in the company. 2 Purchased office equipment on account, $10,450. 3 Paid office rent for October, $750. 4 Paid $9,650 to access online legal database for two years. 5 Billed clients for services rendered, $11.350. 6 Made 56.050 payment on account for the equipment purchased on October 2. 7 Paid legal assistant's salary, 52,850. 8 Collected $9,450 from clients previously billed for services. 9 Received invoice for October utilities, $230; it will be paid in November. 10 Paid stockholders $1,550 as a cash dividend. Accounting equation Journal entries T-Accounts Trial balance Note: Use negative signs with your answers below, when appropriate. Cash + Accounts Receivable + Database Subscription + Office Equipment = Accounts Payable + Common Stock + Retained Earnings 1 5 0 $ 0 oooooooo ooooooo oooooooooo OOOOOOOOOO 0 - 5 0 + $ 0 - 5 0 = 5 0 - 5 0 - 5 Accounting equation Journal entries T-Accounts Trial balance General Journal Description Ref Debit Credit To record stockholder contribution To record office equipment purchased on account To record payment of rent expense. To record prepayment for database service. To record billing for legal services. (6) To record payment on equipment. To record payment of salaries To record receipt of cash from clients oooo To record utilities expense. (10) To record cash payment of dividends. Accounting equation Journal entries T-Accounts Trial balance Cash Accounts Receivable Office Equipment Legal Database (5) (2) Bal Bal Bal Bal Accounts Payable Common Stock Dividends Legal Fees Earned (10) Salaries Expense Rent Expense Utilities Expense (7) (3) Bal Determine the balance in each account and prepare a trial balance sheet as of October 31. DANIEL KELLY, ATTORNEY-AT-LAW Trial Balance October 31 Debit Credit Cash Accounts Receivable Office Equipment Legal Database Subscription Accounts Payable Common Stock Dividends Legal Fee Earned Salaries Expense Rent Expense Utilities Expense Totals o o o o o o o o O
