Question
Transaction Analysis, Trial Balance, and Financial Statements On December 1, a group of individuals formed a corporation to establish the Arcadia News , a neighborhood
Transaction Analysis, Trial Balance, and Financial Statements On December 1, a group of individuals formed a corporation to establish the Arcadia News, a neighborhood newspaper featuring "Help wanted" ads of 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 want ads. The December transactions are summarized below:
The following transactions occurred during the month of December:
1 | Sold common stock of Arcadia News, for cash. | $60,000 |
2 | Paid December rent on furnished office. | 5,000 |
3 | Purchased on account, T-shirts displaying company, | |
logo. The T-shirts were distributed at a grand opening. | 550 | |
4 | Paid amount owed to creditor on account. | 350 |
5 | Collected "Help wanted" 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 newspaper, | 6,300 |
8 | Paid Courier Service for transporting newspapers to post office. | 70 |
9 | Paid for printing newspaper. | 3,900 |
10 | Collected "Help wanted" ad revenue in cash. | 4,570 |
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 Courier Service for transporting newspapers to post office. | 60 |
17 | Collected on accounts receivable. | 5,100 |
18 | Purchased fax machine for office in exchange, | |
for a six month note payable. A. Prepare a trial balance as of December 31. B. Prepare an Income Statement for the month of December C. 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. | 3,100
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