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P2-61A. (Learning Objectives 4,5: Journalize and post transactions; prepare a trial bal- ance) During the first month of operations, Cloutier Services, Inc., completed the following transactions: Aug 2 Cloutier Services received $69,000 cash and issued common stock to the stockholders. 3 Purchased supplies, $500, and equipment, $11,800, on account. 4 Performed services for a customer and received cash, $5,600. 7 Paid cash to acquire land, $33,000 11 Performed services for a customer and billed the customer, $3,300 Cloutier expects to Paid for the equipment purchased August 3 on account. Paid for newspaper advertising, $560 Received partial payment from customer on account, $1,200 Received and paid the water and electricity bills, $390. Received $3,000 cash for servicing the heating unit of a customer. Paid employee salaries, $2,500 Declared and paid dividends of $2,000. collect within one month 16 17 18 22 29 31 31 Requirements 1. Record each transaction in the journal. Be sure to record the date in each entry. Explana tions are not required. 2. Post the transactions to the T-accounts, using transaction dates as posting references. Determine the ending balance in each account. 3. Prepare the trial balance of Cloutier Services, Inc., at August 31 of the current year. 4. Michael Cloutier, the manager, asks you how much in total resources the business has to work with how much it owes, and whether August was profitable (and by how much).

how to solve the next question? for the T-account

art in Aug 2 o00 /200 A/R inleye ih Assets

8 oop 2000

business   accounting   
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Answer #1

Journal entries, ledger accounts and trial balance as below:

Req 1

Cloutier Services, Inc. Journal entries Date Account Debit Credit Comments 2-Aug Cash $ 69,000 Common Stock $ 69,000 3-Aug Supplies 500 $ 11,800 Equipment Accounts Payable $ 12,300 4-Aug Cash $ 5,600 Cash received is debit- Debit what comes in Service Revenue $ 5,600 Revenue is income - Credit all income and gains This entry is wrong in question $ 33,000 7-Aug Land Cash $ 33,000 11-Aug Accounts Receivable $3,300 Accounts Receivable- Debit the receiver Service Revenue $ 3,300 Revenue is income - Credit all income and gains This entry is wrong in question 16-Aug Accounts Payable $ 11,800 Cash 11,800 17-Aug Advertising Expense 560 Cash 560 18-Aug Cash $ 1,200 Accounts Receivable $ 1,200 22-Aug Utilties Expense $390 Cash $390 29-Aug Cash $ 3,000 Service Revenue $ 3,000 31-Aug Salaries Expense $ 2,500 Cash $ 2,500 31-Aug Dividends $ 2,000 Cash $ 2,000

Req 2Cloutier Services, Inc. T Accounts Date Debit Date CreditDate Debit Date Credit Date Debit Date CreditDate Debit Date Credit Cash Accounts Receivable Supplies Equipment 2-Aug $69,000 7-Aug $33,000 11-Aug $ 3,300 18-Aug 1,200 3-Aug 500 3-Aug $11,800 4-Aug $ 5,600 16-Aug $11,800 18-Aug 1,200 17-Aug $ 560 29-Aug $ 3,000 22-Aug $ 390 31-Aug 2,500 31-Aug 2,000 $28,550 $ 2,100 Accounts Payable Bal Bal Bal $ 500 Bal $11,800 Land Common Stock Dividends 7-Aug $33,000 16-Aug $11,8003-Aug $12,300 2-Aug $69,000 31-Aug $ 2,000 $33,000 Service Revenue $69,000 Bal $ 2,000 Utilities expense Bal Bal 500 Bal Salaries expense Advertising expense 4-Aug $ 5,600 11-Aug $ 3,300 29-Sep $ 3,000 31-Aug $ 2,500 17-Aug 560 22-Aug $ 390 Bal $11,900Bal $ 2,500 Bal $ 560 Bal $ 390

Req 3

Cloutier Services, Inc. Account Cash Accounts Receivable Supplies Equipment Land Accounts Payable Common Stock Dividends Service Revenue Salaries Expense Advertising Expense Utilties Expense Totals Trial Balance Debit Credit 28,550 2,100 500 11,800 33,000 500 69,000 2,000 11,900 2,500 560 390 81,40081,400

Req 4

Cloutier Services, Inc. Balance Sheet Liabilities Current Liabilities Assets Current Assets Cash Accounts Receivable Supplies Total Current Assets 28,550 Accounts Payable 500 2,100 500 31,150 Total Current Liabilities 500 Fixed Assets Land Equipment Total Fixed Assets Stockholders Equity 33,000Common Stock 11,800 Retained earnings 44,800 Total Stockholders Equity 69,000 6,450 75,450 Total Assets 75,950 Total Liabilities & Stockholders Equity75,950 Workings Retained Earnings Statement Net Profit Less Dividends Closing Balance 8,450 2,000 6,450 Total Resources the business has to work with are the Total Assets of the company -$75,950 The business owes $500 in Accounts PayableCloutier Services, Inc Income Statement 11,900 Service Revenue Expenses Salaries Expense Advertising Expense Utilties Expense Total Expenses 2,500 560 390 3,450 Net Profit 8,450 August was profitable by $ 8,450

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