The Acorn Nursery School Corporation provides baby-sitting and child-care programs. On January 31, 20xx, the company had the following trial balance:

Acorn Nursery School Corporation

Trial Balance

January 31, 20xx

Cash (111) $1,870

Accounts Receivable (113) 1,700

Equipment (141) 1,040

Buses (143) 17,400

Notes Payable (211) $15,000

Accounts Payable (212) 1,640

Common Stock (311) 4,000

Retained Earnings (312) 1,370

$22,010 $22,010

During the month of February, the company completed the following transactions:

Feb. 2 Paid this month's rent $270.

3 Received fees for this month's services, $650.

4 Purchased supplies on account, $85.

5 Reimbursed the bus driver for gas expenses, $40.

6 Ordered playground equipment $1,000.

8 Made a payment on account, $170.

9 Received payments from customers on account, $1,200.

10 Billed customers who had not yet paid for this month's services, $700.

11 Paid for the supplies purchased on February 4.

13 Received and purchased playground equipment ordered on February 6 for cash, $1,000.

17 Purchased equipment on account, $290.

19 Paid this month's utility bill, $145.

22 Received payment for one month's services from customers previously billed, $500.

26 Paid part-time assistants for services, $460.

27 Purchased gas and oil for the bus on account, $325.

28 Declared and paid a dividend of $110.

Instructions:

1. (Journal Entries) Enter the above transactions in the general journal (Pages 17 and 18)

2. Open accounts in the ledger for the accounts in the trial balance plus the following ones: Supplies (115); Dividends (313); Service Revenue (411); Rent Expense (511); Gas and Oil Expense (512); Wages Expense (513); and Utilities Expense (514).

3. Enter the January 31, 20xx, account balances from the trial balance.

4. Post the entries to the ledger accounts. Be sure to make the appropriate posting references in the journal and ledger as you post.

5. Prepare a trial balance as of February 28, 20xx.

6. User insight: Examine the transactions for February 3, 9, 10, and 22. What were the revenues and how much cash was received from the revenues? What business issue might you see arising from the differences in these numbers?