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The following events apply to Montgomery Company for Year 1, its first year of operation:
- Received cash of $30,000 from the issue of common stock.
- Performed $49,000 of services on account.
- Incurred $6,700 of other operating expenses on account.
- Paid $22,000 cash for salaries expense.
- Collected $35,000 of accounts receivable.
- Paid a $3,100 dividend to the stockholders.
- Performed $9,600 of services for cash.
- Paid $5,600 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.
Answer & Explanation
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