Transaction Analysis and Trial Balance Ashley Somers owns San Diego Art Company, a firm providing designs for advertisers, market analysts, and others. On July 1, the business's general ledger showed the following normal account balances: Cash $11,100 Accounts Payable $2,400 Accounts Receivable 10,400 Notes Payable 5,600 Common Stock 10,900 Retained Earnings 2,600 Total Assets $21,500 Total Liabilities and Stockholders' Equity $21.500 The following transactions occurred during the month of July: July 1 Paid July rent, $1,270. 2 Collected $8,700 on account from customers. 3 Paid $3,100 installment due on the $5,600 noninterest-bearing note payable. 4 Billed customers for design services rendered on account, $20,150. 5 Rendered design services and collected from cash customers, $1,800. 6 Paid $2,300 to creditors on account. 7 Collected $15,350 on account from customers. 8 Paid a delivery service for delivery of graphics to commercial firms, $1,000. 9 Paid July salaries, $5,200. 10 Received invoice for July advertising expense, to be paid in August, $1,200. 11 Paid utilities for July, $950. 12 The business paid a $2,600 cash dividend. 13 Received invoice for supplies used in July, to be paid in August, $2,860. 14 Purchased computer for $4,900 cash to be used in business starting next month. Required: a. Set up accounts for the general ledger accounts with July 1 balances and enter the beginning balances. Also provide the following accounts: Equipment; Dividends; Service Fees Earned; Rent Expense; Salaries Expense; Delivery Expense; Advertising Expense; Utilities Expense; and Supplies Expense. Prepare journal entries and record the listed transactions in the appropriate T-accounts. b. Prepare a trial balance as of July 31. Journal Entries T-Accounts Trial Balance Cash 11,100 Beg Bal 0 1,270 0 8,700 0 3,100 1,800 0 15,350 (2) (3) (5) (6) (7) (8) (9) (11) (12) (14) Bal 2,300 0 1,000 5,200 950 2,600 4,900 0 0 0 0 0 Beg Accounts Receivable 10,400 0 8,700 10 Equipment 0 0 (2) (14) Bal 0 (4) Equipment 0 0 (14) Bal 0 0 Beg (2) (4) (7) Bal Accounts Receivable 10,400 0 0 8,700 0 15,350 0 0 0 0 Notes Payable 0 0 Beg (3) Bal 0 0 0 0 Accounts Payable Common Stock 0 0 0 Beg Bal 0 0 0 0 Beg (6) (10) (13) Bal 0 0 0 Retained Earnings 0 0 0 Beg Bal 0 0 Dividends 0 0 (12) Bal 0 0 Service Fees Earned 0 0 Rent Expense 0 (1) Bal 0 (5) Bal 0 0 0 0 0 Salaries Expense 0 0 (9) Bal 0 0 Bal 0 Salaries Expense 0 0 (9) Bal 0 0 Delivery Expense 0 0 (8) Bal 0 0 Advertising Expense 0 0 Utilities Expense 0 (10) Bal (11) Bal 0 0 Supplies Expense 0 (13) 0 Bal 0 0
