Reference no: EM132493741

Question - Please discuss in the group section and post your solution individually.

On July 31, 2017, the general ledger of Hills Legal Services Inc. showed the following beginning balances: Cash $4,000, Accounts Receivable $1,500, Supplies $500, Equipment $5,000, Accounts Payable $4,100, Common Stock $3,500, and Retained Earnings $3,400. During August, the following transactions occurred.

Aug. 3 Collected $1,200 of accounts receivable due from customers.

Aug. 5 Received $1,300 cash for issuing common stock to new investors.

Aug. 6 Paid $2,700 cash on accounts payable.

Aug. 7 Performed legal services of $6,500, of which $3,000 was collected in cash and the remainder was due on account.

Aug. 12 Purchased additional equipment for $1,200, paying $400 in cash and the balance on account.

Aug. 14 Paid salaries $3,500, rent $900, and advertising expenses $275 for the month of August.

Aug. 18 Collected the balance for the services performed on August 7.

Aug. 20 Paid cash dividend of $500 to stockholders.

Aug. 24 Billed a client $1,000 for legal services performed.

Aug. 26 Received $2,000 from Laurentian Bank; the money was borrowed on a bank note payable that is due in 6 months.

Aug. 27 Agreed to perform legal services for a client in September for $4,500. The client will pay the amount owing after the services have been performed.

Aug. 28 Received the utility bill for the month of August in the amount of $275; it is not due until September 15.

Aug. 31 Paid income tax for the month $500.

Instructions -

(a) Using T-accounts, enter the beginning balances to the ledger.

(b) Journalize the August transactions.

(c) Post the August journal entries to the ledger.

(d) Trial balance on August 31, 2017.