Question

Comprehensive Accounting Cycle Review 11-02 (Part Level Submission) Karen Noonan opened Skysong Cleaning Services Inc. on February 1, 2022. During February, the following transactions were completed: Feb. 1 1 3 Issued 5,500 shares of Skysong Cleaning Services common stock for $14,300. Each share has a $1.50 par. Borrowed $8,800 on a 2-year, 6% note payable. Paid $9,920 to purchase used floor and window cleaning equipment from a company going out of business ($5,300 was for the floor equipment and $4,620 for the window equipment), Paid $240 for February Internet and phone services. Purchased deaning supplies for $1,080 on account. Hired 4 employees. Each will be paid $530 per 5-day work week (Monday-Friday). Employees will begin working Monday, February 9. Obtained insurance coverage for $10,820 per year. Coverage runs from February 1, 2022. through January 31, 2023. Karen paid $2,705 cash for the first quarter of coverage. Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Karen sold the window cleaning equipment for $4,350 cash. Billed customers $4,290 for cleaning services performed through February 13, 2022 Received $612 from a customer for 4 weeks of deaning services to begin February 21, 2022 (By paying in advance, this customer received 10% off the normal weekly fee of $170.) Paid $330 on amount owed on cleaning supplies. Pald $3 per share to buy 330 shares of Skysong Cleaning Services common stock from a shareholder who disagreed with management goals. The shares will be held as treasury shares. Billed customers $4,730 for cleaning services performed through February 20. Paid cash for employees' wages for 2 weeks (February 9-13 and 16-20). Collected $2,750 cash from customers billed on February 16. Paid $240 for Internet and phone services for March. Declared and paid a cash dividend of $0.25 per share. 16 20 24 25 27 28

Answer 1

Credit ($) Debit($) 14,300 Journal No. Date Account Titles and Explanation 1-Feb Cash Common stock (5500*1.5) Paid in excess of par (To record the issuance of common stock) 8,250 6,050 8,800 1-Feb Cash 6% Notes payable (To record the issuance of note) 8,800 5,300 4,620 1-Feb Equipment - Floor Equipment - Window Cash (To record the purchase of equipment) 9,9201 1-Feb Phone bill Cash 240 (To record the internet and phone expense paid) 1,080 3-Feb Supplies Casn (To record the paymant for supplies) - 330 20-Feb Treasury stock (3*330) Cash (To record the purchase of common stock) 990 4,730 23-Feb Accounts receivable Service revenue (To record the services performed) 4,730 4,240 24-Feb Wages (530*4*2) Cash (To record the payment of wages) 4,240 2,750 25-Feb Cash Accounts receivable (To record the collection from debtors) 2,750 27-Feb Prepaid Phone bill Cash (To record the internet and phone expense paid for March) 240 1,375 28-Feb Dividend (5500*0.25) Cash (To record the payment of dividend) 1,375 307 Adjusting entries: Bad debt expense (4290+4730-2750+4180-220)*3% Allowance for Doubtful accounts (To record the allowance for doubtful accounts) 307 Insurance expense (2705/3) Prepaid insurance (To record the insurance expense incurred) 9021 Unearned service revenue (680/4) Service revenue (To record the revenue realised) 170 Rest of the adjusting entries are correct as given in the question.