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Thrifty Tax Services, Inc. was organized in 2017 to provide tax and accounting services to small businesses. The following are balance sheet values as of January 1, 2018: Cash $ 1,400 Accounts receivable 750 Supplies 210 Equipment 8,200 Patent 5,900 Accounts payable 600 Notes payable -0- Common Stock 2,000 Additional Paid in Capital 12,000 Retained earnings 1,860 Total $16,460 $16,460 Consider the following transactions that occurred during January 2018: Sold 1,000 shares of $1 par value stock for $10 per share to investors. Borrowed $7,500 from a local bank signing a promissory note due at the end of two years. Purchased miscellaneous supplies on account for $350. Billed a client $2,000 for tax preparation services. Paid a $650 bill from the local newspaper for advertising for the month of January. The ad appeared in the paper during January. Received $500 from the client billed in entry (d). Received cash of $1,400 for services provided in preparing a clients tax return. Purchased computer equipment for $4,000 in cash. Paid $1,650 in salaries and wages for January. Received and paid $700 for utilities. Required 1. Enter beginning balances in T-accounts. 2. Prepare journal entries for each transaction. 3. Post the entries to the T-accounts. Key your entries with the transaction letters used here. 4. Prepare a classified balance sheet for the month ended January 31, 2018. The ending balance in Retained Earnings as of January 31, 2018 (after closing entries) is $2,260.

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