Question

The general ledger of Red Storm Cleaners at January 1, 2018, includes the following account balances:

   

Accounts	Debits			Credits
Cash	$	12,000
Accounts Receivable		6,400
Supplies		2,400
Equipment		18,000
Accumulated Depreciation				$	6,200
Salaries Payable					8,700
Common Stock					17,000
Retained Earnings					6,900
Totals	$	38,800		$	38,800

   

The following is a summary of the transactions for the year:

1. March 12 Provide services to customers, $44,000, of which $19,400 is on account.
2. May 2 Collect on accounts receivable, $16,400.
3. June 30 Issue shares of common stock in exchange for $6,000 cash.
4. August 1 Pay salaries, $24,400 (of which $8,700 is for salaries payable in 2017).
5. September 25 Pay repairs and maintenance expenses, $11,400.
6. October 19 Purchase equipment for $6,400 cash.
7. December 30 Pay $1,100 cash dividends to stockholders.
8. Accrued salaries at year-end amounted to $1,100. Depreciation for the year on the equipment is $3,400. Office supplies remaining on hand at the end of period.

1. Enter the unadjusted balances from the trial balance and post the adjusting entries to the T-accounts, and post the closing entries to the T-accounts..

2. Record each of the summary transactions listed above.

3.Prepare an unadjusted trial balance

4.Record adjusting entries.

5.Prepare an adjusted trial balance

6.Prepare the income statement for the year ended December 31, 2018

7.Prepare the classified balance sheet for the year ended December 31, 2018

8.Record closing entries

Answer 1

1 & 2 :

Cash:

Jan 1, Bal	12,000	Aug 1	24,400
Mar 12	24,600	Sep 25	11,400
May 2	16,400	Oct 19	6,400
June 30	6,000	Dec 30	1,100
Dec 31, Bal	15,700

Accounts Receivable:

Jan 1, Bal.	6,400	May 2	16,400
Mar 12	19,400
Dec 31, Bal	9,400

Supplies:

Jan 1, Bal	2,400	Supplies Expense	???
Dec 31, Bal	???

Equipment:

Jan 1, Bal	18,000
Oct 19	6,400
Dec 31, Bal	24,400

Accumulated Depreciation:

		Jan 1, Bal	6,200

Salaries Payable:

Aug 1	8,700	Jan 1, Bal	8,700

Common Stock:

		Jan 1, Bal	17,000
		June 30	6,000
		Dec 31, Bal	23,000

Retained Earnings:

		Jan 1 , Bal	6,900

Dividends:

Dec 30	1,100

Service Revenue:

		Mar 12	44,000

Salaries Expense:

Aug 1	15,700

In the books of Red Storm Cleaners:

Date	Account Titles	Debit	Credit
		$	$
Mar 12	Cash	24,600
	Accounts Receivable	19,400
	Service Revenue		44,000
May 2	Cash	16,400
	Accounts Receivable		16,400
June 30	Cash	6,000
	Common Stock		6,000
August 1	Salaries Payable	8,700
	Salaries Expense	15,700
	Cash		24,400
September 25	Repairs and Maintenance Expense	11,400
	Cash		11,400
October 19	Equipment	6,400
	Cash		6,400
December 30	Dividends	1,100
	Cash		1,100

3.

Red Storm Cleaners Unadjusted Trial Balance December 31, 2018
Account Titles	Debit	Credit
	$	$
Cash	15,700
Accounts Receivable	9,400
Supplies	2,400
Equipment	24,400
Accumulated Depreciation : Equipment		6,200
Salaries Payable		0
Common Stock		23,000
Retained Earnings		6,900
Dividends	1,100
Service Revenue		44,000
Salaries Expense	15,700
Repairs and Maintenance Expense	11,400
Totals	$ 80,100	$ 80,100