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Magazine Chapter 2: 37PGB (page 109)
Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance
Theodore McMahon opened a law office on April 1, 2018. During the first month of operations, the business completed the following transactions:
Apr. 1 McMahon contributed \(70,000 cash to the business, Theodore McMahon, Attorney. The business issued common stock to McMahon.
3 Purchased office supplies, \)1,100, and furniture, \(1,300, on account.
4 Performed legal services for a client and received \)2,000 cash.
7 Purchased a building with a market value of \(150,000, and land with a market value of \)30,000. The business paid \(40,000 cash and signed a note payable to the bank for the remaining amount.
11 Prepared legal documents for a client on account, \)400.
15 Paid assistant鈥檚 semimonthly salary, \(1,200.
16 Paid for the office supplies purchased on April 3 on account. 18 Received \)2,700 cash for helping a client sell real estate.
19 Defended a client in court and billed the client for \(1,700.
25 Received a bill for utilities, \)650. The bill will be paid next month.
28 Received cash on account, \(1,100.
29 Paid \)3,600 cash for a 12-month insurance policy starting on May 1.
29 Paid assistant鈥檚 semimonthly salary, \(1,200.
30 Paid monthly rent expense, \)2,100.
30 Paid cash dividends of $3,200.
Requirements 2: Open the following four-column accounts including account numbers: Cash, 101; Accounts Receivable, 111; Office Supplies, 121; Prepaid Insurance, 131; Land, 141; Building, 151; Furniture, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; Common Stock, 301; Dividends, 311; Service Revenue, 411; Salaries Expense, 511; Rent Expense, 521; and Utilities Expense, 531.
Short Answer
The dividends are profits that are distributed to the owners and the required four-column accounts are prepared in step 2.
Step by step solution
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