Question

On July 31, 2022, the general ledger of Cullumber Legal Services Inc. showed the following balances: Cash $4,960, Accounts Receivable $1,860, Supplies $620, Equipment $6,200, Accounts Payable $5,080, Common Stock $4,340, and Retained Earnings $4,220. During August, the following transactions occurred.

Aug. 3 Collected $1,490 of accounts receivable due from customers.

5 Received $1,610 cash for issuing common stock to new investors.

6 Paid $3,350 cash on accounts payable.

7 Performed legal services of $8,060, of which $3,720 was collected in cash and the remainder was due on account.

12 Purchased additional equipment for $1,490, paying $500 in cash and the balance on account.

14 Paid salaries $4,340, rent $1,120, and advertising expenses $340 for the month of August.

18 Collected the balance for the services performed on August 7. 20 Paid cash dividend of $620 to stockholders.

24 Billed a client $1,240 for legal services performed.

26 Received $2,480 from Laurentian Bank; the money was borrowed on a bank note payable that is due in 6 months.

27 Agreed to perform legal services for a client in September for $5,580. The client will pay the amount owing after the services have been performed.

28 Received the utility bill for the month of August in the amount of $340; it is not due until September 15.

31 Paid income tax for the month $620.

Part 1: Using T-accounts enter the beginning balances to the ledger.

Part 2: Journalize the August transactions.

Part 3: Post the August journal entries to the ledger.

Part 4: Prepare a trial balance on August 31 2022.

Answer 1