Accounting problem P4-8A help

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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Answers

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Hope this helps. I will admit that this is not my original work, but it appears to be accurate based on my quick review of the numbers.

July 1: Dr: Cash; Cr : Linda Blye , Owner's Equity
July 1: Dr: Accts Pay 7911; Cr: Cash 2155, Equipment 10066 (subtract 2155 from 10066 to Accts Pay)
July 3: Dr: Supplies 941; Cr: Accts Pay: 941
July 5: Dr: Insurance Exp: 1825; Cr: Cash: 1825
July 12: Dr: Accts Rec: 3225; Cr: Services: 3225
July 18: Dr: Accts Pay: 1818 (1304+514); Cr: Cash: 1818
July 20: Dr: Salaries: 2250; Cr: Cash: 2250
July 21: Dr: Cash: 1559; Cr: Accts Rec: 1559
July 25: Dr: Accts Rec: 2699; Cr: Services: 2699
July 31: Dr: Maintenance: 380; Cr: Cash: 380
July 31: Dr: Owner's Equity: 641; Cr: Cash: 641

#2
1) Debit: Expense: 1788
Credit: Services: 1788

2) Debit: Equipment: 260 (after depreciation 9806)
Credit: Depreciation: 260

3) Debit: Insurance: 1825
Credit: Insurance (adjusted): 152 (total after adjustment 1673)
divide 1 by 12 then multiply the result by 1825

4) Debit: Inventory: 360
Credit: Supplies: 581 (941-360)

5) Debit: Interest: 427
Credit: Notes Payable: 427

answered 2 years ago

phxsuns14






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