Problem 2-3A (Part Level Submission)

Maquoketa Services was formed on May 1, 2017. The followingtransactions took place during the first month.
Transactions on May 1:
1 Jay BradFord invested $40,000 cash in the company, as its soleowner.
2 Hired two employees to work in the warehouse. They will each bepaid a salary of $3,050 per month.
3 Signed a 2-year rental agreement on a warehouse; paid $24,000cash in advance for the first year.
4 Purchased furniture and equipment costing $30,000. A cashpayment of $10,000 was made immediat
5 Paid $1,800 cash for a one-year insurance policy on thefurniture and equipment.

Transactions during the remain

6 Purchased basic office supplies for $420 cash.

7 Purchased more office supplies for $1,500 on account.

8 Total revenues earned were $20,000—$8,000 cash and $12,000 onaccount.
9 Paid $400 to suppliers for accounts payable due.
10 Received $3,000 from customers in payment of accountsreceivable.
11 Received utility bills in the amount of $380, to be paid nextmonth.
Paid the monthly salaries of the two employees, totaling$6,100.
12
Prepare a trial balance as of May 31, 2017.
g the first month.

salary of $3,050 per month.

advance for the first year.
$10,000 was made immediately; the remainder will be paidin 6 months.
TRIAL BALANCE

Accounts Title Debit Credit

Cash $ 8,280
Jay BradFords' Capital $ 40,000
Prepaid Rent $ 24,000
Furniture & Equipment $ 30,000
Accounts Payable $ 21,480
Prepaid Insurance $ 1,800
Office Supplies $ 1,920
Service revenue $ 20,000
Accounts Receivable $ 9,000
Utilities expenses $ 380
Salaries expense $ 6,100

$ 81,480 $ 81,480
paidin 6 months.

($ 40,000 less $ 24,000 less $ 10,000 less $ 1,800 less $

420 add $ 8000 less $ 400 add $ 3000 less $ 6,100)

($ 20,000 add $ 1,500 less $ 400 add $ 380)

($ 420 add $ 1,500)

($ 12,000 less $ 3,000)