Question

Required information The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances: Debits Credits Асcounts $12,500 6,500 2,500 17,500 Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Salaries Payable Common Stock Retained Earnings 6,000 8,500 17,500 7,000 $39,000 $39,000 Totals The following is a summary of the transactions for the year: 1. March 2. Мay 3. June 4. August 5. September 25 Pay repairs and maintenance expenses, $11,500. 6. Оctober 7. December 12 Provide services to customers, $45,000, of which $19,500 is on account. 2 Collect on accounts receivable, $16,500. 30 Issue shares of common stock in exchange for $5,000 cash. 1 Pay salaries of $8,500 from 2020 (prior year). 19 Purchase equipment for $6,500 cash. 30 Pay $1,000 cash dividends to stockholders.

Answer 1

Ans : Service revenue = $ 45000.(march 12)

account receivable = $ 6500 (beginning balance) + $ 19,500 (on account) - $ 16500 (may 2 collections)

= $ 9500.

cash = $ 12.500 (beginning balance) + 45000- 19500 (march 1) + 16500 (may 2) + $ 5000 (June 3) - $ 8,500 (August 1)- $ 11,500 (September 25) - $ 6500 (October 19) - $ 1000 (December 30)

= $ 32000

Common stock = $ 17,500 (beginning balance) + $ 5000 (June 3)

= $ 22,500.

Salaries payable = $ 8,500 ( beginning balance - $ 8,500 ( August 4) = 0

Repairs and maintenance expenses = $ 11500 (September 25) = 11500

Equipment = $ 17,500 (beginning balance + $ 6500 (October 19)

= $ 24000

Dividends = $ 1000

Remaining account balance remains same .

Red Storm Cleaners
Adjusted trial balance
December 31,2021
Accounts	Debit	Credit
Cash	32000
accounts receivable	9500
Supplies	2500
Equipment	24000
Accumulated depreciation		6000
Salaris payable		0
Common stock		22500
Retained earnings		7000
Dividends	1000
service revenue		45000
Salaries expenses		0
Repairs and maintenance expenses	11500
Depreciation expenses	0
Supplies expenses	0
Total	80500	80500