The following events apply to Montgomery Company for 2016, its first year of ope

Question

The following events apply to Montgomery Company for 2016, its first year of operation: 1. Received cash of $42,000 from the issue of common stock. 2. Performed $61,000 of services on account. 3. Incurred $9,100 of other operating expenses on account. 4. Paid $34,000 cash for salaries expense. 5. Collected $41,000 of accounts receivable. 6. Paid a $4,300 dividend to the stockholders. 7. Performed $10,800 of services for cash. 8. Paid $6,800 of the accounts payable. Required a. Record the preceding transactions in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Post the entries to T-accounts and determine the ending balance in each account.

Explanation / Answer

a 1 Cash 42000     Common Stock 42000 2 Accounts Receivable 61000      Service Revenue 61000 3 Other operating expenses 9100     Accounts Payable 9100 4 Salaries expense 34000      Cash 34000 5 Cash 41000      Accounts Receivable 41000 6 Dividends 4300      Cash 4300 7 Cash 10800      Service Revenue 10800 8 Accounts Payable 6800      Cash 6800 b Cash Accounts Receivable Beg. Bal. 0 Beg. Bal. 0 1 42000 34000 4 2 61000 5 41000 4300 6 41000 5 7 10800 6800 8 End. Bal. 48700 20000 Accounts Payable Common Stock Beg. Bal. 0 Beg. Bal. 8 6800 9100 3 42000 1 End. Bal. 2300 End. Bal. 42000 Dividends Service Revenue Beg. Bal. 0 Beg. Bal. 0 6 4300 61000 2 10800 7 End. Bal. 4300 End. Bal. 71800 Salaries expense Other operating expenses Beg. Bal. 0 Beg. Bal. 0 4 34000 3 9100 End. Bal. 34000 End. Bal. 9100

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