Question

Comprehensive Problem 4 a-g Kristin Malone opened Kristin's Maids Cleaning Service on July 1, 2019. During July, the company completed the following transactions. July 1 Stockholders invested $15,000 cash in the business in exchange for common stock. 1 Purchased a used truck for $11,000, paying $3,200 cash and the balance on account. 3 Purchased cleaning supplies for $800 on account. 5 Paid $1,608 on a 1-year insurance policy, effective July 1. 12 Billed customers $3,900 for cleaning services. 18 Paid $1,000 of amount owed on truck, and $200 of amount owed on cleaning supplies. 20 Paid $1,600 for employee salaries. 21 Collected $1,600 from customers billed on July 12. 25 Billed customers $1,500 for cleaning services. 31 Paid gasoline for the month on the truck, $300. 31 Declared and paid a $700 cash dividend.

Answer 1

1) The required worksheet is shown as follows:- (Amounts in $)

KRISTIN'S MAIDS CLEANING SERVICE
Worksheet
Account Titles	Trial Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Cash	7,992				7,992				7,992
Accounts Receivable	3,800		1,500		5,300				5,300
Supplies	800			600	200				200
Prepaid Insurance	1,608			134	1,474				1,474
Equipment	11,000				11,000				11,000
Accounts Payable		7,400				7,400				7,400
Common Stock		15,000				15,000				15,000
Dividends	700				700				700
Service Revenue		5,400		1,500		6,900		6,900
Gasoline Expense	300				300		300
Salaries and Wages Expense	1,600		400		2,000		2,000
Totals	27,800	27,800
Depreciation Expense			220		220		220
Accum. Depr.-Equipment				220		220				220
Insurance Expense			134		134		134
Supplies Expense			600		600		600
Salaries and Wages Payable				400		400				400
Totals			2,854	2,854	29,920	29,920	3,254	6,900	26,666	23,020
Net Income							3,646			3,646
Totals							6,900	6,900	26,666	26,666

Working Notes:-

1) Calculation of Cash Balance in Trial Balance (Amounts in $)

Issue of Common Stock	15,000
Cash paid for Truck	(3,200)
Prepaid Insurance paid	(1,608)
Amount owed for truck paid	(1,000)
Amount owed for supplies paid	(200)
Salaries paid	(1,600)
Collection from Customers	1,600
Gasoline Expense paid	(300)
Dividends paid	(700)
Ending Balance of Cash before Adjustments	7,992

Accounts Receivable before adjustments = 3,900-1,600+1,500 = $3,800

Accounts Payable before adjustments = (11,000-3,200)+800-1,000-200 = $7,400