Question

The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances: Credits Debits $ 4,500 9,500 3,500 36,000 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Utilities Payable Deferred Revenue Common Stock Retained Earnings Totals $ 8,000 6,000 7,000 23,000 9,500 $53,500 $53,500 The following is a summary of the transactions for the year: 1. January 24 Provide plumbing services for cash, $20,000, and on account, $65,000. 2. March 13 Collect on accounts receivable, $53,000. 3. May 6 Issue shares of common stock in exchange for $11,000 cash. 4. June 30 Pay salaries for the current year, $33,000. 5. September 15 Pay utilities of $7,000 from 2020 (prior year). 6. November 24 Receive cash in advance from customers, $10,000. 7. December 30 Pay $3,000 cash dividends to stockholders. The following information is available for the adjusting entries. Depreciation for the year on the machinery is $8,000. Plumbing supplies remaining on hand at the end of the year equal $1,100. Of the $10,000 paid in advance by customers, $7,000 of the work has been completed by the end of the year. Accrued utilities at year-end amounted to $6,000.

Answer 1

Credit Calculation Pipers Plumbing Journal entries No. Date Account 1 24-Jan Cash Accounts Receivable Service Revenue Debit $ 20,000 $ 65,000 $ 85,000 $ 53,000 2 13-Mar Cash Accounts Receivable $ 53,000 3 $ 11,000 6-May Cash Common Stock $ 11,000 4 $ 33,000 30-Jun Salaries expense Cash $ 33,000 5 $ 7,000 15-Sep Utilties Payable Cash $ 7,000 $ 10,000 6 24-Nov Cash Deferred Revenue $ 10,000 $ 3,000 $ 3,000 7 30-Dec Dividends Cash Adjusting entries 8 31-Dec Depreciation expense Accumulated Depreciation $ 8,000 $ 8,000 9 $ 2,400 =3,500-1,100 31-Dec Supplies expenses Supplies $ 2,400 $ 7,000 10 31-Dec Deferred Revenue Service Revenue $ 7,000 $ 6,000 $ 6,000 11 31-Dec Utilties expenses Utilties Payable Closing entries 12 31-Dec Service Revenue Retained Earnings $ 92,000 $ 92,000 $ 49,400 13 31-Dec Retained Earnings Salaries expense Utilties expenses Supplies expenses Depreciation expense $ 33,000 $ 6,000 $ 2,400 $ 8,000 $ 3,000 14 31-Dec Retained Earnings Dividends $ 3,000

Pipers Plumbing T Accounts Date Debit Date Credit Date Date Date Credit Cash Debit Date Credit Accounts Receivable $ 9,500 $ 65,000 13-Mar $53,000 Debit Date Credit Supplies $ 3,500 31-Dec $ 2,400 Debit Date Equipment $ 36,000 Op bal Op bal Op bal 24-Jan 13-Mar 6-May 24-Nov Op bal 24-Jan $ 4,500 $ 20,000 $ 53,000 $ 11,000 $ 10,000 30-Jun $ 33,000 15-Sep $ 7,000 30-Dec $ 3,000 Bal. Bal. Bal. Bal. $ 55,500 Accumulated Depreciation Op bal $ 8,000 31-Dec $ 8,000 $ 21,500 Accounts Payable Op bal $ 1,100 Utilties Payable $ 7,000 Op bal $ 7,000 31-Dec $ 6,000 $ 36,000 Deferred Revenue Op bal $ 7,000 24-Nov $ 6,000 15-Sep $ . $10,000 31-Dec $ 16,000 $ 3,000 Bal. Common Stock Op bal 6-May Bal. $ 6,000 Retained Earnings 31-Dec $ 49,400 Op bal $ 9,500 31-Dec $ 3,000 31-Dec $ 92,000 Bal. $ 6,000 Dividends $ 3,000 31-Dec $ 3,000 $ 23,000 $ 11,000 Bal. Service Revenue 24-Jan 31-Dec $ 92,000 31-Dec 30-Dec $ 85,000 $ 7,000 Bal. $ 34,000 Salaries expense $ 33,000 31-Dec $ 33,000 Bal. $ 49,100 Bal. Utilties expenses 31-Dec $ 6,000 31-Dec $ 6,00031-Dec $ - Supplies expenses $ 2,400 31-Dec $ Bal. $ - Depreciation expense 31-Dec $ 8,000 31-Dec $ 8,000 30-Jun 2,400 Bal. $ . Bal. $ - Bal. $ - Bal. $-

Unadjusted TB Debit Credit 55,500 21,500 3,500 36,000 8,000 6,000 Pipers Plumbing Account Names Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Utilties Payable Deferred Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries expense Utilties expenses Supplies expenses Depreciation expense Totals Adjusted TB Debit Credit 55,500 21,500 1,100 36,000 16,000 6,000 6,000 3,000 34,000 9,500 3,000 92,000 33,000 6,000 2,400 8,000 166,500 166,500 Post Closing TB Debit Credit 55,500 21,500 1,100 36,000 16,000 6,000 6,000 3,000 34,000 49,100 10,000 34,000 9,500 3,000 85,000 33,000 152,500 152,500 114,100 114,100

92,000 Pipers Plumbing Income Statement For the Year Ended Dec 31, 2021 Service Revenue Expenses Salaries expense Utilties expenses Supplies expenses Depreciation expense Total Expenses Net Income 33,000 6,000 2,400 8,000 49,400 42,600 Statement of Retained Earnings For the Year Ended Dec 31, 2021 Retained Earnings, Jan 1, 2021 Net Income Less Dividends Retained Earnings, Dec 31, 2021 9,500 42,600 (3,000) 49,100

Pipers Plumbing Balance Sheet As of Dec 31, 2021 Assets Current Assets Cash Accounts Receivable Supplies Total Current Assets Liabilities & Stockholders Equity Current Liabilities 55,500 Accounts Payable 21,500 Utilties Payable 1,100 Deferred Revenue 78,100 Total Current Liabilities 6,000 6,000 3,000 15,000 Long-term Assets Equipment Accumulated Depreciation Total Long-term Assets Stockholders Equity 36,000 Common Stock (16,000) Retained earnings 20,000 Total Stockholders Equity 34,000 49,100 83,100 Total Assets 98,100 Total Liabilities & Stockholders Equity 98,100