Trim Lawn, Inc., is a lawn care company. Thus, the company earns its revenue from sending its trucks to customers” residences and certain commercial establishments to care for lawns and shrubbery. Trim Lawn”s trial balance at the end of the first 11 months of the year follows:
|
TRIM LAWN, INC. |
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|
Acct. |
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|
No. |
Account Title |
Debits |
Credits |
|
100 |
Cash |
$63,740 |
|
|
103 |
Accounts Receivable |
88,600 |
|
|
150 |
Trucks |
102,900 |
|
|
160 |
Office Furniture |
8,400 |
|
|
200 |
Accounts Payable |
$33,600 |
|
|
300 |
Capital Stock |
30,000 |
|
|
310 |
Retained Earnings, 2010 January 1 |
30,540 |
|
|
400 |
Service Revenue |
371,010 |
|
|
505 |
Advertising Expense |
18,300 |
|
|
506 |
Gas an d Oil Expense |
21,900 |
|
|
507 |
Salaries Expense |
65,850 |
|
|
511 |
Utilities Expense |
2,310 |
|
|
515 |
Rent Expense |
15,000 |
|
|
518 |
Supplies Expense |
75,600 |
|
|
531 |
Entertainment Expense |
2,550 |
|
|
$465,150 |
$465,150 |
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Dec. 2 Paid rent for December, USD 3,000.
5 Paid the accounts payable of USD 33,600.
8 Paid advertising for December, USD 1,500.
10 Purchased a new office desk on account, USD 1,050.
13 Purchased USD 240 of supplies on account for use in December.
15 Collected cash from customers on account, USD 75,000.
20 Paid for customer entertainment, USD 450.
24 Collected an additional USD 6,000 from customers on account.
26 Paid for gasoline used in the trucks in December, USD 270.
28 Billed customers for services rendered, USD 79,500.
30 Paid for more December supplies, USD 12,000.
31 Paid December salaries, USD 15,300.
31 Paid a USD 4,000 cash dividend. (The Dividends account is No. 320.)
a. Open three-column general ledger accounts for each of the accounts in the trial balance under the date of 2010 December 1. Place the word Balance in the explanation space of each account. Also open an account for Dividends, No. 320.
b. Prepare entries in the general journal for the preceding transactions for December 2010.
c. Post the journal entries to three-column general ledger accounts.
d. Prepare a trial balance as of 2010 December 31.