The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2010.

Question:

The following transactions occurred during January 2011:

Jan.1 Sold merchandise for cash, $3,500. The cost of the merchandise was $2,000. The company uses the perpetual inventory system.

2 Purchased equipment on account for $5,500 from the Strong Company.

4 Received a $150 bill from the local newspaper for an advertisement that appeared in the paper on January 2.

8 Sold merchandise on account for $5,000. The cost of the merchandise was $2,800.

10 Purchased merchandise on account for $9,500.

13 Purchased equipment for cash, $800.

16 Paid the entire amount due to the Strong Company.

18 Received $4,000 from customers on account.

20 Paid $800 to the owner of the building for January’s rent.

30 Paid employees $3,000 for salaries for the month of January.

31 Paid a cash dividend of $1,000 to shareholders.

Required:

1. Set up T-accounts and enter the beginning balances as of January 1, 2011.

2. Prepare general journal entries to record each transaction. Omit explanations.

3. Post the entries to T-accounts.

4. Prepare an unadjusted trial balance as of January 31, 2011.

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