Question

Required information

The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances:

Accounts	Debits				Credits
Cash	$	10,500
Accounts Receivable		6,100
Supplies		2,100
Equipment		19,500
Accumulated Depreciation					$	6,800
Salaries Payable						9,300
Common Stock						15,500
Retained Earnings						6,600
Totals	$	38,200			$	38,200

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

1.		March		12		Provide services to customers, $41,000, of which $19,100 is on account.
2.		May		2		Collect on accounts receivable, $16,100.
3.		June		30		Issue shares of common stock in exchange for $6,000 cash.
4.		August		1		Pay salaries of $9,300 from 2020 (prior year).
5.		September		25		Pay repairs and maintenance expenses, $11,100.
6.		October		19		Purchase equipment for $6,100 cash.
7.		December		30		Pay $1,100 cash dividends to stockholders.

Prepare a post-closing trial balance.

Answer 1

Credit Red Storm Cleaners Journal entries Date Account 12-Mar Cash Accounts Receivable Service Revenue Debit $ 21,900 $ 19,100 Calculation =41000-19100 $ 41,000 $ 16,100 2-May Cash Accounts Receivable $ 16,100 $ 6,000 30-Jun Cash Common Stock $ 6,000 $ 9,300 1-Aug Salaries Payable Cash $ 9,300 25-Sep Repairs and maintenance expenses $ 11,100 Cash $ 11,100 $ 6,100 19-Oct Equipment Cash $ 6,100 $ 1,100 $ 1,100 30-Dec Dividends Cash Closing entries 31-Dec Service Revenue Income Summary $ 41,000 $ 41,000 $ 11,100 31-Dec Income Summary Repairs and maintenance expenses $ 11,100 $ 29,900 31-Dec Income Summary Retained Earnings $ 29,900 $ 1,100 31-Dec Retained Earnings Dividends $ 1,100

Date Credit Credit Red Storm Cleaners T Accounts Date Debit Date Credit Cash Op bal $ 10,500 1-Aug $ 9,300 12-Mar $ 21,900 25-Sep $ 11,100 2-May $ 16,100 19-Oct $ 6,100 30-Jun $ 6,000 30-Dec $ 1,100 Date Debit Date Credit Accounts Receivable Op bal $ 6,100 12-Mar $ 19,100 2-May $ 16,100 Debit Date Supplies $ 2,100 Date Debit Date Equipment Op bal $ 19,500 19-Oct $ 6,100 Op bal Bal. Bal. $ 26,900 Accum. Depr. - Equipment Op bal $ 6,800 Bal. $ 9,100 Salaries payable 1-Aug $ 9,300 Op bal $ 2,100 Common Stock Op bal $15,500 30-Jun $ 6,000 Bal. $ 25,600 Retained Earnings 31-Dec $ 1,100 Op bal $ 6,600 31-Dec $ 29,900 $ 9,300 Bal. Bal. $ 6,800 Service Revenue 12-Mar $ 41,000 31-Dec $ 41,000 Bal. $ Repairs and maintenance expenses 25-Sep $ 11,100 31-Dec $ 11,100 $ 21,500 Dividends 30-Dec $ 1,100 31-Dec $ 1,100 Bal. $ 35,400 Income Summary 31-Dec $ 11,100 31-Dec $ 41,000 31-Dec $ 29,900 Bal. $ - Bal. $ . Bal. $ - Bal. $

Red Storm Cleaners Account Names Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Salaries Payable Common Stock Retained Earnings Totals Post Closing TB Debit Credit 26,900 9,100 2,100 25,600 6,800 21,500 35,400 63,700 63,700