Mulberry Services sells electronic data processing services to firms too small to own their own computing equipment. Mulberry had the following accounts and account balances as of January 1:
Accounts Payable 14,000
Accounts Receivable. 130,000
Cash 6,000
Common Stock 114,000
Interest Payable 8,000
Notes Payable (Long-term) 80,000
Prepaid Rent (Short-term) 96,000
Retained Earnings, January 1 16,000

During the year, the following transactions occurred (the events described below are aggregations of many individual events):

a. During the year, Mulberry sold $690,000 of computing services, all on credit.
b. Mulberry collected $570,000 from the credit sales in Transaction a and an additional $129,000 from the accounts receivable outstanding at the beginning of the year.
c. Mulberry paid the interest payable of $8,000.
d. Wages of $379,000 were paid in cash.
e. Repairs and maintenance of $9,000 were incurred and paid.
f. The prepaid rent at the beginning of the year was used during the year. In addition, $28,000 of computer rental costs were incurred and paid. There is no prepaid rent or rent payable at year-end.
g. Mulberry purchased computer paper for $13,000 cash in late December. None of the paper was used by year-end.
h. Advertising expense of $26,000 was incurred and paid.
i. Income tax of $10,300 was incurred and paid during the year.
j. Interest of $5,000 was paid on the long-term loan.

Required:
1. Establish a ledger for the accounts listed above and enter the beginning balances.
2. Analyze each transaction. Journalize as appropriate.
3. Post your journal entries to T-accounts. Add additional T-accounts when needed.
4. Use the ending balances in the T-accounts to prepare a trial balance.
Chart Of Accounts
CHART OF ACCOUNTS
Mulberry Services
General Ledger
ASSETS
111 Cash
121 Accounts Receivable
122 Notes Receivable
123 Supplies
124 Prepaid Insurance
125 Prepaid Rent
126 Inventory
131 Land
132 Buildings
133 Equipment
134 Furniture
135 Trucks
139 Accumulated Depreciation
LIABILITIES
211 Accounts Payable
212 Notes Payable
213 Income Taxes Payable
214 Wages Payable
215 Utilities Payable
216 Insurance Payable
217 Interest Payable
218 Rent Payable
219 Unearned Service Revenue
231 Bonds Payable
EQUITY
311 Common Stock
321 Retained Earnings
331 Dividends
REVENUE
411 Sales Revenue
412 Service Revenue
413 Interest Income
EXPENSES
511 Cost of Goods Sold
512 Advertising Expense
513 Supplies Expense
514 Utilities Expense
515 Rent Expense
516 Insurance Expense
517 Repairs and Maintenance Expense
521 Wages Expense
531 Interest Expense
532 Depreciation Expense
533 Income Taxes Expense
T-Accounts
1. The account title for each T-account has been provided. Based on the data provided, enter the applicable beginning balances.
3. Post your journal entries to T-accounts. Add additional T-accounts when needed.