At the beginning of 2016, Oak consulting had the following normal balances in it

Question

At the beginning of 2016, Oak consulting had the following normal balances in its accounts:

At the beginning of 2016, Oak Consulting had the following normal balances in its accounts: Account Cash Accounts recelvable Accounts payable Common stock Retained earnings Balance $42,000 25,000 payable 24,000 8,400 34,600 The following events apply to Oak's Consulting for 2016: 1. Provided $185,000 of services on account. 2. Incurred $45,800 of operating expenses on account. 3. Collected $140,000 of accounts recelvable. 4. Paid $120,000 cash for salaries expense. 5. Paid $31,400 cash as a partial payment on accounts payable. 6. Paid an $10,000 cash dividend to the stockholders.

Explanation / Answer

a.Journal Entries:

c. Horizontal statement model:

Date Accounts Titles and explanation Debit $ Credit $ Accounts Receivable 185000 Service revenue 185000 Operating expenses 45800 Accounts Payable 45800 Cash 140000 Accounts Receivable 140000 Salaries expenses 120000 Cash 120000 Accounts Payable 31400 Cash 31400 Dividend 10000 Cash 10000

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