Recording events in the general journal, posting to T-accounts, and preparing closing entr...

Recording events in the general journal, posting to T-accounts, and preparing closing entries

At the beginning of 2011, Tim’s Consulting had the following normal balances in its accounts:

The following events apply to Tim’s Consulting for 2011.

1. Provided $118,000 of services on account.

2. Incurred $ 11,980 of operating expenses on account.

3. Collected $124,000 of accounts receivable.

4. Paid $71,000 cash for salaries expense.

5. Paid $13,600 cash as a partial payment on accounts payable.

6. Paid an $11,000 cash dividend to the stockholders.

Required

a. Record these transactions in a general journal.

b. Open T-accounts, and post the beginning balances and the preceding transactions to the appropriate accounts.

c. Record the beginning balances and the transactions in a horizontal statements model such as the following one:

d. Record the closing entries in the general journal and post them to the T-accounts. What is the amount of net income for the year?

e. What is the amount of change in retained earnings for the year? Is the change in retained earnings different from the amount of net income? If so, why?