ACC 290 P4-8A

Linda Blye opened Cardinal Window Washing Inc. on July 1, 2010. During July the following transactions were completed.

























July 1


Issued 11,000 shares of common stock for $11,000 cash.




1


Purchased used truck for $9,000, paying $2,000 cash and the balance on account.




3


Purchased cleaning supplies for $900 on account.




5


Paid $1,800 cash on 1-year insurance policy effective July 1.




12


Billed customers $3,200 for cleaning services.




18


Paid $1,000 cash on amount owed on truck and $500 on amount owed on cleaning supplies.




20


Paid $2,000 cash for employee salaries.




21


Collected $1,400 cash from customers billed on July 12.




25


Billed customers $2,500 for cleaning services.




31


Paid $260 for gas and oil used in the truck during month.




31


Declared and paid $600 cash dividend.














The chart of accounts for Cardinal Window Washing contains the following accounts: Cash, Accounts Receivable, Cleaning Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Salaries Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Gas & Oil Expense, Cleaning Supplies Expense, Depreciation Expense, Insurance Expense, Salaries Expense.
Hint: Complete all steps in accounting cycle.









Instructions











(a)


Journalize the July transactions.








(b)


Post to the ledger accounts. (Use T accounts.)








(c)


Prepare a trial balance at July 31.








(d)


Journalize the following adjustments.










1.


Services provided but unbilled and uncollected at July 31 were $1,700.








2.


Depreciation on equipment for the month was $250.








3.


One-twelfth of the insurance expired.








4.


An inventory count shows $360 of cleaning supplies on hand at July 31.








5.


Accrued but unpaid employee salaries were $400.











(e)


Post adjusting entries to the T accounts.








(f)


Prepare an adjusted trial balance.


Cash $ 4,240








(g)


Prepare the income statement and a retained earnings statement for July and a classified balance sheet at July 31.


Tot. assets $21,000








(h)


Journalize and post closing entries and complete the closing process.








(i)


Prepare a post-closing trial balance at July 31.


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