The following balances were taken from the general ledger of Benson Company on January 1, 2003:

n. Purchased additional short-term investments of $15,000 during 2003. (Note: Short-term investments are current assets.) O. Paid 2003 corporate income taxes of $11,600. p. Paid cash dividends of $7,600. 1. Journalize the 2003 transactions. (Omit explanations.) 2. Set up T-accounts with the proper account balances at January 1, 2003, and post the journal entries to the T-accounts. 3. Determine the account balances, and prepare a trial balance at December 31, 2003. 4. Prepare an income statement and a balance sheet. (Remember that the dividends account and all revenue and expense accounts are temporary retained earnings accounts.) 5. Interpretive Question: Why are revenue and expense accounts used at all?

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Debits Credits Cash. $13,500 Short-Term Investments 10,000 Accounts Receivable.. 12,500 Inventory 15,000 Land. 25,000 75,000 20,000 $17,500 12,500 2,500 Mortgage Payable 37,500 70,000 31,000 Buildings Equipment. Notes Payable Accounts Payable. Salaries and Wages Payable.. Capital Stock (7,000 shares outstanding). Retained Earnings During 2003, the company completed the following transactions: a. Purchased inventory for $110,000 on credit. b. Issued an additional $25,000 of capital stock (2,500 shares) for cash. C. Paid property taxes of $4,500 for the year 2003. d. Paid advertising and other selling expenses of $8,000. e. Paid utilities expense of $6,500 for 2003. f. Paid the salaries and wages owed for 2002. Paid additional salaries and wages of $18,000 during 2003. g. Sold merchandise costing $105,000 for $175,000. Of total sales, $45,000 were cash sales and $130,000 were credit sales. h. Paid off notes of $17,500 plus interest of $1,600. i. On November 1, 2003, received a loan of $10,000 from the bank. j. On December 30, 2003, made annual mortgage payment of $2,500 and paid interest of $3,700. k. Collected receivables for the year of $140,000. Paid off accounts payable of $112,500. m. Received dividends and interest of $1,400 on short-term investments during 2003. (Record as Miscellaneous Revenue.)