Question

Required information The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances: Credits Debits $ 18,500 7,700 3,700 13,500 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Salaries Payable Common Stock Retained Earnings Totals $ 4,400 6,400 23,500 9,100 $ 43,400 $ 43,400 The following is a summary of the transactions for the year: 1. March 12 Provide services to customers, $57,000, of which $20,700 is on account. 2. May 2 Collect on accounts receivable, $17,700. 3. June 30 Issue shares of common stock in exchange for $6,000 cash. 4. August 1 Pay salaries of $6,400 from 2020 (prior year). 5. September 25 Pay repairs and maintenance expenses, $12,700. 6. October 19 Purchase equipment for $7,700 cash. 7. December 30 Pay $1,100 cash dividends to stockholders.

Answer 1

Answer:

Posting of transactions:

Cash					Accounts receivable
Beg. Bal.	$18,500	$6,400	Aug.1		Beg. Bal.	$7,700	$17,700	May 2
Mar.12	$36,300	$12,700	Sept.25		Mar.12	$20,700
May 2	$17,700	$7,700	Oct.19
June 30	$6,000	$1,100	Dec 30
End. Bal.	$50,600				End. Bal.	$10,700
Supplies					Equipment
Beg. Bal.	$3,700				Beg. Bal.	$13,500
					Oct.19	$7,700
End. Bal.	$3,700				End. Bal.	$21,200
Accumulated depreciation					Salaries payable
Beg. Bal.		$4,400			Beg. Bal.	$6,400	$6,400	Aug.1
End. Bal.		$4,400			End. Bal.		$0
Common stock					Retained earnings
Beg. Bal.		$23,500			Beg. Bal.		$9,100
		$6,000	June 30
End. Bal.		$29,500			End. Bal.		$9,100
Service revenue					Cash dividends
Beg. Bal.					Beg. Bal.
		$57,000	Mar.12		Dec 30	$1,100
End. Bal.		$57,000			End. Bal.	$1,100
Salaries expense					Repairs and Maintenance expense
Beg. Bal.					Beg. Bal.
					Sept.25	$12,700
End. Bal.					End. Bal.	$12,700
Depreciation expense					Supplies expense
Beg. Bal.					Beg. Bal.
End. Bal.					End. Bal.