van stubbs started an environmental consulting company and during the first month of 538341

Recording transactions, using four-column accounts, posting, and preparing a trial balance

Van Stubbs started an environmental consulting company and during the first month of operations (October 2012), the business completed the following transactions:

a.	Stubbs began the business with an investment of $40,000 cash and a building at $26,000. The business gave $66,000 of capital to Stubbs.
b.	Purchased office supplies on account, $2,400.
c.	Paid $18,000 for office furniture.
d.	Paid employee”s salary, $1,900.
e.	Performed consulting services on account, $3,600.
f.	Paid $500 of the account payable created in transaction (b).
g.	Received a $300 bill for advertising expense that will be paid in the near future.
h.	Performed consulting service for cash, $800.
i.	Received cash on account, $1,400.
j.	Paid the following cash expenses: (1) Rent on equipment, $700. (2) Utilities, $500.
k.	Stubbs withdrew cash of $2,400.

4 5

Requirements

1. Open the following four-column accounts: Cash; Accounts receivable; Office supplies; Office furniture; Building; Accounts payable; Stubbs, capital; Stubbs, drawing; Service revenue; Salary expense; Rent expense; Advertising expense; and Utilities expense.

2. Record each transaction in the journal. Use the letters to identify the transactions.

3. Post to the accounts and keep a running balance for each account.

4. Prepare the trial balance of Stubbs Environmental Consulting Company at October 31, 2012.