Question

(The following information applies to the questions displayed below.) The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances: Credits Debits $ 4,000 9,000 3,000 26,000 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Utilities Payable Deferred Revenue Common Stock Retained Earnings Totals $ 6,000 4,000 5,000 0 18,000 9,000 $42,000 $ 42,000 The following is a summary of the transactions for the year: 24 Provide plumbing services for cash, $15,000, and on account, $60,000. 2. March 13 Collect on accounts receivable, $48,000. 3. May 6 Issue shares of common stock in exchange for $10,000 cash. 4. June 30 Pay salaries for the current year, $32,000. 5. September 15 Pay utilities of $5,000 from 2020 (prior year). 6. November 24 Receive cash in advance from customers, $8,000. 7. December 30 Pay $2,000 cash dividends to stockholders. The following information is available for the adjusting entries. Depreciation for the year on the machinery is $6,000. Plumbing supplies remaining on hand at the end of the year equal $1,000. Of the $8,000 paid in advance by customers, $6,000 of the work has been completed by the end of the year.

Answer 1

Date	Account title	Debit	credit
31 December 2021	Service revenue	81000
	Income summary		81000
	[To close revenue]
31 December 2021	Income summary	40000
	Salaries expense		32000
	Depreciation expense		6000
	Supplies expense		2000
	[To close expense]
31 December 2021	Income summary	41000
	Retained earning [81000-40000]		41000
	[To close net income]
31 December 2021	Retained earning	2000
	Dividend		2000

**Total service revenue = sales on Jan 24(both cash and credit) 15000+60000 + 6000 of deferred revenue earned

                           = 81000

**Supplies used = 3000beginning - 1000 at end = 2000