Question

Lars Linken opened Concord Cleaners on March 1, 2022. During March, the following transactions were completed.

Mar. 1		Issued 11,000 shares of common stock for $16,500 cash.
1		Borrowed $6,600 cash by signing a 6-month, 6%, $6,600 note payable. Interest will be paid the first day of each subsequent month.
1		Purchased used truck for $8,800 cash.
2		Paid $1,800 cash to cover rent from March 1 through May 31.
3		Paid $2,700 cash on a 6-month insurance policy effective March 1.
6		Purchased cleaning supplies for $2,200 on account.
14		Billed customers $4,070 for cleaning services performed.
18		Paid $550 on amount owed on cleaning supplies.
20		Paid $1,930 cash for employee salaries.
21		Collected $1,760 cash from customers billed on March 14.
28		Billed customers $4,620 for cleaning services performed.
31		Paid $390 for gas and oil used in truck during month (use Maintenance and Repairs Expense).
31		Declared and paid a $990 cash dividend.

The chart of accounts for Concord Cleaners contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Rent, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Salaries and Wages Payable, Notes Payable, Interest Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Maintenance and Repairs Expense, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Rent Expense, and Interest Expense.

A. Journalize the March transactions

B. Post to the ledger accounts

C. Prepare a trial balance at March 31.

D. Journalize the following adjustments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

1.		Services performed but unbilled and uncollected at March 31 was $220.
2.		Depreciation on equipment for the month was $280.
3.		One-sixth of the insurance expired.
4.		An inventory count shows $310 of cleaning supplies on hand at March 31.
5.		Accrued but unpaid employee salaries were $1,190.
6.		One month of the prepaid rent has expired.
7.		One month of interest expense related to the note payable has accrued and will be paid April 1.

E.Post adjusting entries to the T-accounts.

Cash
3/1	16,500	3/1	8,800
3/1	6,600	3/2	1,800
3/21	1,760	3/3	2,700
		3/18	550
		3/20	1,930
		3/31	390
		3/31	990
3/31 Bal.	7,700

F. Prepare an adjusted trial balance.

G. Prepare the income statement for March.

G2. Prepare a retained earnings statement for March. (List items that increase retained earnings first.)

G3. Prepare a classified balance sheet at March 31.

Answer 1

JOURNAL ENTRIES Debit Credit 16500 16500 6600 6600 8800 8800 1800 1800 2700 2700 2200 2200 4070 Sl.No Account titles Mar-01 Cash Common Stock (To record the issue of common stock) Mar-01 Cash Notes Payable (To record receipt of borrowing) Mar-01 Truck Cash (To record purchase of truck) Mar-02 Prepaid rent Cash (To record prepaid rent) Mar-03 Prepaid insurance Cash (To record prepaid insurance) Mar-06 Supplies Accounts Payable (to record the purchase of cleaning supplies on credit) Mar-14 Accounts receivable Service revenue (To record service revenue) Mar-18 Accounts Payable Cash (To record payment to account payable) Mar-20 Salaries and wages Cash (To record the payment of salary) Mar-21 Cash Accounts receivable (to record receipt from accounts receivable) Mar-28 Accounts receivable Service revenue (To record service revenue) Mar-31 Maintenance and Repairs Expense Cash (To record the repayment of Maintenance and Repairs Expense) Mar-31 Dividend Cash (To record payment of dividend) 4070 550 550 1930 1930 1760 1760 4620 4620 390 390 990 990

220 220 280 280 450 450 1890 Adjustment entries Mar-31 Accrued revenue Service revenue (To record unbilled service revenue) Mar-31 Depreciation Accumlated depreciation (To record depreciation for the month) Mar-31 Insurance Prepaid Insurance (To record expired portion of insurance) Mar-31 Supplies expense Supplies (To record supplies expense) Mar-31 Salary and wages Salaries & wages Payable (To record accrued salary &wage) Mar-31 Rent expense Prepaid rent (To record expired rent) Mar-31 Interest expense Interest Payable To record Accrued Interest for 1months) 1890 1190 1190 600 600 33 33

Common Stock Notes Payable Particula Date Particulars Amount Date rs Amount Date Particulars Amount Date Particulars Amount Mar- 01 Mar- 01 bal 16500 Cash 16500 bal 6600 Cash 6600 16500 16500 6600 6600 Truck Prepaid Rent Particula Date Particulars Amount Date rs Amount Amount Date Particulars Amount Mar- 01 Date Particulars Mar- 02 Cash Cash 8800 Bal 8800 1800 Bal 1800 8800 8800 1800 1800 Prepaid Insurance Supplies Particula Particulars Amount Date rs Amount Amount Date Particulars Amount Date Mar- 03 Date Particulars Mar Acounts 06 payable Cash 2700 2200 Bal 2700 Bal 2200 2700 2700 2200 2200 Accounts Payable Accounts Receivable Particula Date Particulars Amount Date rs Amount Amount Date Particulars Amount Mar- 18 Mar- 06 Supplies Mar- 21 Cash 550 Date Particulars Mar-Service 14 Revenue Mar Service 28 Revenue 2200 4070 cash 1760 bal 1650 4620 bal 6930 2200 2200 8690 8690

Salaries & Wages Date Particulars Amount Date Particulars Amount Date Particulars Amount Service Revenue Particula Amount Date rs Accounts Mar- receivabl 8690 14 e Accounts Mar-receivabl 28 e Mar- 20 Cash bal 4070 1930 4620 bal 1930 8690 8690 1930 1930 Dividend Maintenance and Repairs Expense Particula Particulars Amount Date rs Date Amount Amount Date Particulars Amount Mar- 31 Date Particulars Mar- 31 cash cash 390 Bal 390 990 bal 990 390 390 990 990 Cash Particula Amount rs Amount Date Mar- 01 Particulars Common Stock Date Mar- 01 16500 Truck 8800 Apr-Notes 01 Payable 6600 1800 Mar- Prepaid 02 rent Prepaid Mar- insuranc 03 e Mar Accounts 21 receivable 1760 2700 550 Mar Accounts 18 Payable Salaries Mar- and 20 wages 1930 Mainten ance and Mar- Repairs 31 Expense Mar- 31 Dividend bal 390 990 7700 24860 24860

Unadjusted Trail Balance Adjustments Debit Credit Adjusted Trail Balance Debit Credit Debit Credit 7700 7700 0 16500 0 16500 6600 0 6600 8800 8800 0 1800 600 1200 0 2700 450 2250 0 2200 1890 310 0 1650 1650 6930 6930 0 8690 220 0 8910 1930 1190 3120 0 Account Titles Cash Common Stock Notes payable Truck Prepaid Rent Prepaid insurance supplies Accounts Payable Accounts Receivable service Revenue salaries & wages Maintenance and Repairs Expense Dividend Accrued Revenue Depreciation Accumlated Depreciation Insurance Supplies expense Salaries & wagesPayable Rent expense Interest expense Interest Payable Totals 390 390 0 990 990 0 220 220 0 280 280 0 280 0 280 450 450 0 1890 1890 0 1190 0 1190 600 600 0 33 33 0 33 0 33 33440 33440 4663 4663 35163 35163 8910 Lars Linken Income Statement For the year ended 31st March 2022 Revenues Service Revenue 8910 Total Revenue Less: Expenses salaries & wages 3120 Maintenance and Repairs Expense 390 Depreciation 280 Insurance 450 Supplies expense 1890 Rent expense 600 Interest expense 33 Total Expense Net Profit Lars Linken Statement of Retained Earnings For the year ended 31st March 2022 Beginning Retained Earnings 0 Net Profit 2147 Less: Dividend 990 Closing Retained Earnings 1157 6763 2147

Lars Linken Balance sheet 31-Mar-22 Assets 7700 6930 310 1200 Cash Accounts receivable Supplies Prepaid rent Prepaid insurance Accrued Revenue Truck Accumlated Depreciation Total Assets 2250 220 8800 -280 8520 27130 1650 1190 6600 Liabilities Accounts Payable Salaries & wages payable Notes payable Interest Payable Equity Common stock Retained Earnings Total Liabilities & RE 33 16500 1157 17657 27130

Answer 2

Income statement