Transaction Analysis, Trial Balance, and Financial Statements On December 1, a group of individuals formed a corporation to establish the Arcadia News, a neighborhood newspaper featuring "Help wanted" ads of individuals and advertising by local firms. The free paper will be mailed to about 20,000 local residents; revenue will be generated from advertising and want ads. The December transactions are summarized below:
The following transactions occurred during the month of December:
| 1 |
Sold common stock of Arcadia News, for cash. |
$60,000 |
| 2 |
Paid December rent on furnished office. |
5,000 |
| 3 |
Purchased on account, T-shirts displaying company, |
|
| |
logo. The T-shirts were distributed at a grand opening. |
550 |
| 4 |
Paid amount owed to creditor on account. |
350 |
| 5 |
Collected "Help wanted" ad revenue in cash. |
2,800 |
| 6 |
Paid post office for cost of bulk mailing. |
710 |
| 7 |
Billed various firms for advertising in the first two issues of newspaper, |
6,300 |
| 8 |
Paid Courier Service for transporting newspapers to post office. |
70 |
| 9 |
Paid for printing newspaper. |
3,900 |
| 10 |
Collected "Help wanted" ad revenue in cash. |
4,570 |
| 11 |
Received invoice for December utilities, to be paid in January. |
510 |
| 12 |
Paid for printing newspaper. |
4,900 |
| 13 |
Paid December salaries. |
6,100 |
| 14 |
Billed various firms for advertising in two issues of the newspaper. |
8,950 |
| 15 |
Paid post office for cost of bulk mailing. |
630 |
| 16 |
Paid Courier Service for transporting newspapers to post office. |
60 |
| 17 |
Collected on accounts receivable. |
5,100 |
| 18 |
Purchased fax machine for office in exchange, |
|
| |
for a six month note payable. |
3,100 |
Required
a. Set up accounts for the following: Cash, Accounts Receivable, Office Equipment, Accounts Payable, Notes Payable, Common Stock, Advertising Revenue, Want Ad Revenue, Printing Expense, Advertising Expense, Utilities Expense, Salaries Expense, Rent Expense, and Delivery Expense. Prepare journal entries in a general journal and record the foregoing transactions in the accounts.