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Morgan Corporation opened the year 20X6, with the following trial balance information:
MORGAN CORPORATION Trial Balance January 1, 20X6 Debits Credits Cash $ 25,000 Accounts receivable 75,000 Land 150,000 Accounts payable $ 60,000 Loan payable 30,000 Capital stock 50,000 Retained earnings 110,000 Dividends Revenues Salaries expense Rent expense Supplies expense Interest expense $250,000 $250,000
January’s transactions are listed below
Jan. 2 Collected $10,000 on an open account receivable.
Jan. 3 Purchased additional tract of land for $20,000 cash.
Jan. 5 Provided services on account to a customer for $15,000.
Jan. 7 Borrowed $12,000 on a term loan payable.
Jan. 11 Paid salaries of $3,000.
Jan. 12 Provided services to customers for cash, $11,000.
Jan. 15 Purchased (and used) office supplies on account, $2,000.
Jan. 17 The company paid shareholders a $2,500 dividend.
Jan. 20 Paid rent of $1,700.
Jan. 23 Paid salaries of $4,000.
Jan. 24 Paid $16,000 on the open accounts payable.
Jan. 29 Collected $50,000 on accounts receivable.
Jan. 31 Repaid loans of $22,000.
Jan. 31 Paid interest on loans of $600.
(a) Create the general ledger accounts, and enter the initial balances at the start of the month of January. This requirement is already completed on the worksheets.
(b) Prepare journal entries for January’s transactions.
(c) Post January’s transactions to the appropriate general ledger accounts.
(d) Prepare a trial balance as of January 31.
(e) Prepare an income statement and statement of retained earnings for January, and a balance sheet as of the end of January.