Question

The following events apply to Montgomery Company for Year 1, its first year of operation: 1. Received cash of $35.000 from the issue of common stock 2. Performed $54.000 of services on account. 3. Incurred $7700 of other operating expenses on account. 4. Pald $27.000 cash for salaries expense. 5. Collected $37.500 of accounts receivable. 6. Pald a $3.600 dividend to the stockholders. 7. Performed $10,100 of services for cash. 8. Pald $6,100 of the accounts payable. Required a. Record the preceding transactions in general Journal form. b. Post the entries to T-accounts and determine the ending balance in each account. c.& d. Determine the amount of total assets at the end of Year 1, and the amount of net Income for Year 1. Complete this question by entering your answers in the tabs below. Rega Reg B ReqC and D Post the entries to T-accounts and determine the ending balance in each account. Accounts Receivable Beg. Bal Beg Bal Cash End. Bal End. Bal Accounts Payable Common Stock Beg Bal Beg. Bal End. Bal End. Bal Dividends Service Revenue Beg. Bal Beg. Bal End. Bal End. Bali Salaries Expense Other Operating Expense Beg. Bali Beg. Bal End. Bal End. Bal < ReqA ReqC and D >

Answer 1

1. General Journal

No	Account Title and Explanation	Debit	Credit
1	Cash	$35,000
	Common Stock		$35,000
2	Accounts Receivable	$54,000
	Service Revenue		$54,000
3	Other Operating Expenses	$7,700
	Accounts Payable		$7,700
4	Salaries Expenses	$27,000
	Cash		$27,000
5	Cash	$37,500
	Accounts Receivable		$37,500
6	Dividends	$3,600
	Cash		$3,600
7	Cash	$10,100
	Service Revenue		$10,100
8	Accounts Payable	$6,100
	Cash		$6,100

2. Cash

Beg.Bal.	$0
1	$35,000	$27,000	4
5	$37,500	$3,600	6
7	$10,100	$61,00	8
End .Bal	$45,900

Accounts Receivable

Beg.Bal	$0
2	$54,000	$37,500	5
End.Bal	$16,500

Accounts Payable

Beg.Bal		$0
8	$6,100	$7,700	3
End.Bal		$1,600

Common Stock

Beg.Bal		$0
		$35,000	1
End.Bal		$35,000

Dividend

Beg.Bal	$0
6	$3,600
End.Bal	$3,600

Service Revenue

Beg.Bal
		$54,000	2
		$10,100	7
End.Bal		$64,100

Salaries Expenses

Beg.Bal	$0
4	$27,000
And.Bal	$27,000

Other Operating Expenses

Beg.Bal	$0
3	$7,700
End.Bal	$7,700

3. a) Total Assets =$62,400

Explanation;  

Total Assets = Cash + Accounts Receivable = $45,900+ $16,500 = $62,400

b.) Net Income = $29,400

Explanation

Service Revenue		$64,100
Less: Expenses;
Salaries Expenses	$27,000
Other Operating Expenses	$7,700
Total Expenses		$34,700
Net Income		$29,400