Question

The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances:

Accounts	Debits				Credits
Cash	$	4,400
Accounts Receivable		9,400
Supplies		3,400
Equipment		34,000
Accumulated Depreciation					$	7,600
Accounts Payable						5,600
Utilities Payable						6,600
Deferred Revenue						0
Common Stock						22,000
Retained Earnings						9,400
Totals	$	51,200			$	51,200

The following is a summary of the transactions for the year:

1.		January		24		Provide plumbing services for cash, $19,000, and on account, $64,000.
2.		March		13		Collect on accounts receivable, $52,000.
3.		May		6		Issue shares of common stock in exchange for $12,000 cash.
4.		June		30		Pay salaries for the current year, $32,800.
5.		September		15		Pay utilities of $6,600 from 2020 (prior year).
6.		November		24		Receive cash in advance from customers, $9,600.
7.		December		30		Pay $2,800 cash dividends to stockholders.

The following information is available for the adjusting entries.

Depreciation for the year on the machinery is $7,600. Plumbing supplies remaining on hand at the end of the year equal $1,200. Of the $10,000 paid in advance by customers, $6,800 of the work has been completed by the end of the year. Accrued utilities at year-end amounted to $6,200.

1. Prepare each of the summary transactions listed above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

2. Prepare an unadjusted trial balance.

3. Record adjusting entries. Depreciation for the year on the machinery is $7,600. Plumbing supplies remaining on hand at the end of the year equal $1,200. Of the $9,600 paid in advance by customers, $6,800 of the work has been completed by the end of the year. Accrued utilities at year-end amounted to $6,200. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

4.Prepare an adjusted trial balance.

5-a. Prepare an income statement for the year ended December 31, 2021.

5-b. Prepare a classified balance sheet for the year ended December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

6. Record closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

7. Post the transactions, adjusting entries and closing entries to the T-accounts. Be sure to include beginning balances.

8. Prepare a post-closing trial balance.

Answer 1

Pipers Plumbing Journal Enteries Date Particulars 24.1.2021 Cash a/c Dr. Accounts Receivable a/c Dr. To Plumbing Service Revenue (Plumbing Service provided) Debit in $ Credit in $ 19000 64000 83000 13.3.2021 52000 Cash a/c Dr. To Accounts Receivable (Cash received from debtors) 52000 6.5.2021 Dr. 12000 Cash a/c To Common Stock (Common Stock issued for cash) 12000 30.6.2021 Dr. 32800 Salaries Expense a/c To Cash (Salaries paid in cash) 32800 15.9.2021 Dr. Dr. 6600 Utilities Expense a/c Utilities Payable a/c To Cash (Utilities paid in cash) 6600 24.11.2021 Cash a/c Dr. 9600 To Deferred Revenue (Cash received in advance from customers) 9600 2800 30.12.2021 Dividends a/c Dr. To Cash (Dividends paid in cash) 2800

Adjustment Enteries Date Particulars Debit in $ Credit in $ 31.12.2021 Depreciation Expense a/c Dr. 7600 To Accum. Depre - Equip 7600 (Depreciation charged to Equipment) 2200 31.12.2021 Supplies Expense a/c Dr. To Plumbing Supplies (Supplies Expensed) 3400-1200 2200 6800 31.12.2021 Deferred Revenue a/c Dr. To Plumbing Service Revenue 6800 Dr. 6200 31.12.2021 Utilities Expense a/c To Utilities Payable (Expense accrued) 6200 Closing Enteries Date Particulars 31.12.2021 Income Summary a/c Dr. To Salaries Expense To Utilities Expense To Depreciation Expense To Supplies Expense (Expense accounts closed) Debit in $Credit in $ I 48800 32800 6200 7600 2200 89800 31.12.2021 Plumbing Service Revenue a/c Dr. To Income Summary (Revenue accounts closed out) 89800 I 41000 31.12.2021 Income Summary a/c Dr. To Retained Earnings (Profits transferred) 41000 2800 31.12.2021 Retained Earnings a/c Dr. To Dividends (Dividend charged to Retained earnings) 2800

Worksheet For the period ending 31.12.2021 Particulars Cash Accounts Receivable Supplies Equipment Accum. Depre - Equip Accounts Payable Utilities Payable Deferred Revenue Common Stock Retained Earnings Dividends Plumbing Service Revenue Salaries Expense Utilities Expense Depreciation Expense Supplies Expense Totals Unadjusted Adjustment Adjusted Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 54800 54800 54800 21400 21400 21400 3400 2200 1200 1200 34000 34000 34000 7600 7600 15200 15200 5600 5600 5600 6200 6200 6200 9600 6800 2800 2800 34000 34000 34000 9400 9400 47600 2800 2800 83000 6800 89800 32800 32800 6200 6200 7600 7600 2200 2200 149200 149200 22800 2 2800 163000 163000 111400 111400

89800 Statement of Income For the period ending 31.12.2021 Plumbing Service Revenue Less: Salaries Expense Utilities Expense Depreciation Expense Supplies Expense Net Income 32800 6200 7600 2200 48800 41000 Statement of Retained Earnings For the period ending 31.12.2021 Beginning 9400 Net Income 41000 50400 Less:Dividends -2800 47600

Amounts in $ Amounts in $ Balance sheet As at 31.12.2021 Assets Current Assets Cash Accounts Receivable Supplies Amounts in $ Amounts in $ Liabilities Current Liabilities 54800 Accounts Payable 21400 Deferred Revenue 1200 77400 Utilities Payable 5600 2800 6200 14600 Non Current Assets Equipment Accum. Depre - Equip Total Assets 34000 - 15200 Shareholders Equity Common Stock 18800 Retained Earnings 96200 Total Liabilities & Equity 34000 47600 81600 96200