Reference no: EM132429361

Question - Santa Ana Services was formed on May 1, 2014. The following transactions took place during the first month.

Transactions on May 1:

1. Don Humes invested $44,000 cash in the company, as its sole owner.

2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,355 per month.

3. Signed a 2-year rental agreement on a warehouse; paid $26,400 cash in advance for the first year.

4. Purchased furniture and equipment costing $33,000. A cash payment of $10,000 was made immediately; the remainder will be paid in 6 months.

5. Paid $1,980 cash for a one-year insurance policy on the furniture and equipment.

6. Purchased basic office supplies for $550 cash.

7. Purchased more office supplies for $1,650 on account.

8. Total revenues earned were $22,000-$8,000 cash and $14,000 on account.

9. Paid $440 to suppliers for accounts payable due.

10. Received $3,300 from customers in payment of accounts receivable.

11. Received utility bills in the amount of $385, to be paid next month.

12. Paid the monthly salaries of the two employees, totaling $6,710.

Check figures - Trial balance Totals = $90,595

Instructions -

(a) Prepare journal entries to record each of the events listed. (Omit explanations.)

(b) Post the journal entries to T-accounts.

(c) Prepare an Unadjusted trial balance as of May 31, 2014.

(d) Determine amount of net income or loss for May.