Question: Michael Gould started a Web consulting firm called Gould Solutions. He began operations and completed seven transactions in April that resulted in the following accounts, which all have normal balances.
Cash . . . . . . . . . . . . . . . . . . . . . . . $12,485
Office supplies . . . . . . . . . . . . . . . . 560
Prepaid rent . . . . . . . . . . . . . . . . . 1,500
Office equipment . . . . . . . . . . . . . 11,450
Accounts payable . . . . . . . . . . . . . 11,450
M. Gould, Capital . . . . . . . . . . . . . . 10,000
M. Gould, Withdrawals . . . . . . . . . 6,200
Consulting fees earned . . . . . . . . . 16,400
Operating expenses . . . . . . . . . . . 5,655
Required: 1. Prepare a trial balance for this business as of the end of April.
Analysis Component
2. Analyze the accounts and their balances and prepare a list that describes each of the seven most likely transactions and their amounts.
3. Prepare a report of cash received and cash paid showing how the seven transactions in part 2 yield the $12,485 ending Cash balance.