Transaction Analysis and Trial Balance

Make T-accounts for the following accounts that appear in the general ledger of Daniel Kelly, an attorney: Cash; Accounts Receivable; Office Equipment; Legal Database Subscription; Accounts Payable; Common Stock; Dividends; Legal Fees Earned; Salaries Expense; Rent Expense; and Utilities Expense.

Using the accounting equation, record each of the transactions in a columnar format. Prepare journal entries and record the following October transactions in the T-accounts and key all entries with the number identifying the transaction. Determine the balance in each account and prepare a trial balance sheet as of October 31.

Oct.	1	Kelly started his law practice by contributing $32,500 cash to the business on October 1, receiving shares of common stock in the company.
	2	Purchased office equipment on account, $11,700.
	3	Paid office rent for October, $2,000.
	4	Paid $10,900 to access online legal database for two years.
	5	Billed clients for services rendered, $12,600.
	6	Made $7,300 payment on account for the equipment purchased on October 2.
	7	Paid legal assistant's salary, $4,100.
	8	Collected $10,700 from clients previously billed for services.
	9	Received invoice for October utilities, $1,480; it will be paid in November.
	10	Paid stockholders $2,800 as a cash dividend.

Cash	+	Accounts Receivable	+	Database Subscription	+	Office Equipment	=	Accounts Payable	+	Common Stock	+	Retained Earnings
1	$Answer		$Answer		$Answer		$Answer		$Answer		$Answer		$Answer
2	Answer		Answer		Answer		Answer		Answer		Answer		Answer
3	Answer		Answer		Answer		Answer		Answer		Answer		Answer
4	Answer		Answer		Answer		Answer		Answer		Answer		Answer
5	Answer		Answer		Answer		Answer		Answer		Answer		Answer
6	Answer		Answer		Answer		Answer		Answer		Answer		Answer
7	Answer		Answer		Answer		Answer		Answer		Answer		Answer
8	Answer		Answer		Answer		Answer		Answer		Answer		Answer
9	Answer		Answer		Answer		Answer		Answer		Answer		Answer
10	Answer		Answer		Answer		Answer		Answer		Answer		Answer
	$Answer	+	$Answer	+	$Answer	+	$Answer	=	$Answer	+	$Answer	+	$Answer

General Journal
Date	Description	Debit	Credit
(1)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record stockholder contribution.
(2)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record office equipment purchased on account.
(3)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record payment of rent expense.
(4)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record prepayment for database service.
(5)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record billing for legal services.
(6)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record payment on equipment.
(7)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record payment of salaries.
(8)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record receipt of cash from clients.
(9)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record utilities expense.
(10)	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	AnswerCashAccounts ReceivableOffice EquipmentLegal Database SubscriptionAccounts PayableCommon StockDividendsLegal Fees EarnedSalaries ExpenseRent ExpenseUtilities Expense	Answer	Answer
	To record cash payment of dividends.

Cash
(1)	Answer	Answer
(3)	Answer	Answer
(4)	Answer	Answer
(6)	Answer	Answer
(7)	Answer	Answer
(8)	Answer	Answer
(10)	Answer	Answer
Bal	Answer	Answer

Accounts Receivable
(5)	Answer	Answer
(8)	Answer	Answer
Bal	Answer	Answer

Office Equipment
(2)	Answer	Answer
Bal	Answer	Answer

Legal Database
(4)	Answer	Answer
Bal	Answer	Answer

Accounts Payable
(2)	Answer	Answer
(6)	Answer	Answer
(9)	Answer	Answer
Bal	Answer	Answer

Common Stock
(1)	Answer	Answer
Bal	Answer	Answer

Dividends
(10)	Answer	Answer
Bal	Answer	Answer

Legal Fees Earned
(5)	Answer	Answer
Bal	Answer	Answer

Salaries Expense
(7)	Answer	Answer
Bal	Answer	Answer

Rent Expense
(3)	Answer	Answer
Bal	Answer	Answer

Utilities Expense
(9)	Answer	Answer
Bal	Answer	Answer

Determine the balance in each account and prepare a trial balance sheet as of October 31.

DANIEL KELLY, ATTORNEY-AT-LAW
Trial Balance October 31
		Debit		Credit
Cash		$Answer		$Answer
Accounts Receivable		Answer		Answer
Office Equipment		Answer		Answer
Legal Database Subscription		Answer		Answer
Accounts Payable		Answer		Answer
Common Stock		Answer		Answer
Dividends		Answer		Answer
Legal Fee Earned		Answer		Answer
Salaries Expense		Answer		Answer
Rent Expense		Answer		Answer
Utilities Expense		Answer		Answer
Totals		$Answer		$Answer