Question

* I am seriously struggling with this accounting class, and I have no idea where or how to even start this assignment.

Roth Contractors Corporation was incorporated on December 1, 2019 and had the following transactions during December:

Part A

a. Issued common stock for $5,000 cash

b. Paid $1,200 cash for three months’ rent: December 2019; January and February 2020

c. Purchased a used truck for $10,000 on credit (recorded as an account payable)

d. Purchased $1,000 of supplies on credit. These are expected to be used during the month (recorded as expense)

e. Paid $1,800 for a one-year truck insurance policy, effective December 1

f. Billed a customer $4,500 for work completed to date

g. Collected $800 for work completed to date

h. Paid the following expenses in cash: advertising, $350; interest, $100; telephone, $75; truck operating, $425; wages, $2,500

i. Collected $2,000 of the amount billed in f above

j. Billed customers $6,500 for work completed to date

k. Signed a $9,000 contract for work to be performed in January 2020

l. Paid the following expenses in cash: advertising, $200; interest, $150; truck operating, $375; wages, $2,500

m. Collected a $2,000 advance on work to be done in January (the policy of the corporation is to record such advances as revenue at the time they are received)

n. Received a bill for $100 for electricity used during the month (recorded as utilities expense).

Required:

1. Open general ledger T-accounts for the following: Cash, Accounts Receivable, Prepaid Insurance, Prepaid Rent, Truck, Accounts Payable, Common Stock, Repair Revenue, Advertising Expense, Interest Expense, Supplies Expense, Telephone Expense, Truck Operating Expense, Utilities Expense, and Wages Expense. General ledger account numbers are not necessary.

2. Prepare journal entries to record the December transactions. General ledger account numbers and descriptions are not needed.

3. Post the entries to general ledger T-accounts.

Part B

The following information relates to December 31, 2019:

o. One month of the prepaid insurance has expired.

p. The December portion of the rent paid on December 1 has expired.

q. A physical count indicates that $350 of supplies is still on hand.

r. The amount collected in transaction m is unearned at December 31.

s. Three days of wages for December 29, 30, and 31 are unpaid, amounting to $1,500. These will be paid in January.

t. The truck has an estimated useful life of 4 years.

u. Income taxes expense is $500. This amount will be paid in the next fiscal year.

Required:

4. Open additional general ledger T-accounts for the following: Unused Supplies, Accumulated Depreciation, Wages Payable, Unearned Revenue, Income Taxes Payable, Depreciation Expense, Insurance Expense, Rent Expense, and Income Taxes Expense. General ledger account numbers are not necessary.

5. Prepare all necessary adjusting entries. General ledger account numbers and descriptions are not necessary.

6. Post the entries to general ledger T-accounts and calculate balances.

7. Prepare an adjusted trial balance at December 31.

8. Assume the fiscal year-end is December 31, 2019. Prepare an income statement, statement of changes in equity, and balance sheet.

9. Prepare closing entries and a post-closing trial balance at December 31, 2019.

Answer 1

Prepare journal entries as follows:

Trn.	Account Titles	Debit	Credit
a	Cash	$5,000
	Common stock		$5,000
b	Prepaid rent	$1,200
	Cash		$1,200
c	Truck	$10,000
	Accounts payable		$10,000
d	Supplies expense	$1,000
	Accounts payable		$1,000
e	Prepaid insurance	$1,800
	Cash		$1,800
f	Accounts receivable	$4,500
	Repair revenue		$4,500
g	Cash	$800
	Repair revenue		$800
h	Advertising expense	$350
	Interest expense	$100
	Telephone expense	$75
	Truck operating expense	$425
	Wages expnese	$2,500
	Cash		$3,450
i	Cash	$2,000
	Accounts receivable		$2,000
j	Accounts receivable	$6,500
	Repair revenue		$6,500
k	No entry
l	Advertising expense	$200
	Interest expense	$150
	Truck operating expense	$375
	Wages expense	$2,500
	Cash		$3,225
m	Cash	$2,000
	Unearned revenue		$2,000
n	Utilities expense	$100
	Utilities payable		$100
o	Insurance expense	$150
	Prepaid insurance ($1800/12)		$150
p	Rent expense	$400
	Prepaid rent ($1200/3)		$400
q	Supplies	$350
	Supplies expense		$350
r	No entry
s	Wage expense	$1,500
	Wage payable		$1,500
t	Depreciation expense	$2,500
	Accumulated depreciation-truck		$2,500
	($10000/4 years)
u	Income tax expense	$500
	Income tax payable		$500

_____________________________________________________________________

Prepare T-accounts as follows:

Conmon stock / $5,000 Cash $5,000 lb $800 le $2,000 h $2.000 $1,200 $1,800 $3,450 $3,225 End. Bal. $5,000 Accounts payable End. Bal $125 $10,000 $1,000 Prepaid Rent $1,200 p $400 End. Bal. $11,000 End. Bal $800 Repair revenue Truck $10,000 $4,500 $800 $6,500 End. Bal $10,000 End. Bal. $11,800

Prepaid Insurance | $1.800 lo $150 Advertising expense $350 $200 End. Bal. $1,650 End. Bal $550 Accounts receivable $4,500 $6,500 $2.000 Interest expense $100 $150 End. Bal. $9,000 End. Bal $250 Uneamed revenue $2.000 Telephone expense $75 $75 End. Bal. $2.000 End. Bal

Supplies $350 Truck operating expense $425 $375 End. Bal. $350 End. Bal. $800 Utilities expense $100 Wage expense $2,500 $2,500 $1,500 End. Bal. $100 Utilities payable End. Bal. $6,500 Wage payable End. Bal. $100 $1.500 End. Bal $1,500 Supplies expense $1,000 $350 Income tax payable $500 End. Bal. $650 End. Bal $500 Income tax expense $500 Accumulated depr.-truck $2.500 End. Bal. $500 End. Bal $2.500

Depreciation expense $2,500 End. Bal. $2,500