Question

Green Initiatives began operations on October 1, 2019. The November 30, 2019 unadjusted trial balance is included on the trial balance tab. Record the following transactions and events for December, 2019.

  

Dec. 2 Paid $1,090 cash to Southview Mall for Green Initiatives' share of mall advertising costs.Dec. 3 Paid $540 cash for minor repairs to the company's computer.Dec. 4 Received $7,000 cash from Jackson Engineering Co. for the receivable from November.Dec. 10 Paid cash to Michael Green for six days of work at the rate of $180 per day.Dec. 14 Notified by Jackson Engineering Co. that Green Initiatives' bid of $7,200 on a proposed project has been accepted. Jackson paid a $1,600 cash advance to Green Initiatives.Dec. 15 Purchased $2,300 of computer supplies on credit from Pelcher Office Products.Dec. 16 Sent a reminder to Hayes Co. to pay the fee for services recorded on November 8.Dec. 20 Completed a project for Brady Corporation and received $8,000 cash.Dec. 28 Received $4,600 cash from Hayes Co. on its receivable.Dec. 29 Reimbursed M. Green for business automobile mileage (800 miles at $0.32 per mile).Dec. 31 M. Green withdrew $2,600 cash from the company for personal use.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months.

  

1. The December 31 inventory count of computer supplies shows $1,540 still available.
2. Three months have expired since the 12-month insurance premium was paid in advance.
3. As of December 31, Michael Green has not been paid for four days of work at $180 per day.
4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
6. Three of the four months' prepaid rent have expired.

General Journal tab - Prepare journal entries for each of the December transactions. Then, using the information given for adjustments, prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred. After adjusting the accounts, review the general ledger and trial balance for accuracy.

General Ledger tab - Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted or adjusted balances.

Trial Balance tab - You may view either the unadjusted or adjusted trial balance by choosing from the dropdown box below. Your choice will determine the reported values on the financial statement tabs.

Income Statement tab - Use the drop-downs to select the accounts properly included on the income statement. The unadjusted or adjusted balances will appear for each account, based on your selection.

Statement of Owner's Equity tab - The unadjusted or adjusted balances will appear for each account, based on your selection.

Balance Sheet tab - Use the drop-downs to select the accounts properly included on the balance sheet. The unadjusted or adjusted balances will appear for each account, based on your selection.

Impact on Income tab - For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the dropdown.)

You may view either the unadjusted or adjusted trial balance by choosing from the drop-down box below. Your choice will determine the reported values on the financial statement tabs.

UnadjustedAdjustedPost-closing

Unadjusted

GREEN INITIATIVES
Trial Balance
December 31, 2019
Account Title	Debit	Credit
Cash	26,570
Accounts receivable	24,400
Computer supplies	3,270
Prepaid insurance	3,440
Prepaid rent	8,100
Office equipment	14,400
Computer equipment	25,120
M. Green, Capital		85,000
M. Green, Withdrawals	7,800
Computer services revenue		37,600
Wages expense	3,780
Advertising expense	2,940
Mileage expense	880
Miscellanous expenses	490
Repairs expense - Computer	1,410
Total	122,600	122,600

Answer 1

Solution of the above problem is as under:

General Journal Tab: Journal Entries to record the transactions occurred during December 31, 2019
Date	Account Titles and Explanation	Debit ($)	Credit ($)
Dec-02	Advertising Expenses A/c Dr.	1090
	To Cash A/c		1090
	(Being cash paid for mall advertising)
Dec-03	Repair Expenses-Computer	540
	To Cash A/c		540
	(Being cash paid for computer repair)
Dec-04	Cash A/c Dr.	7000
	To Accounts Receivable A/c		7000
	(Being cash received from customer)
Dec-10	Wages Expenses A/c Dr.	1080
	To Cash A/c		1080
	(Being wages paid in cash)
Dec-14	Cash A/c Dr	1600
	To Unearned Service Revenue A/c		1600
	(Being cash received in advance for the services to be provide later on)
Dec-15	Computer Supplies A/c Dr	2300
	To Accounts Payable		2300
	(Being computer supplies purchased on credit)
Dec-16	No Entry
Dec-20	Cash A/c Dr.	8000
	To Computer Service Revenue		8000
	(Being cash received for services rendered)
Dec-28	Cash A/c Dr.	4600
	To Accounts Receivable A/c		4600
	(Being amount received from Hayes Co.)
Dec-29	Mileage Expenses A/c Dr.	256
	To Cash A/c		256
	(Being reimbursement made for business mileage expenses)
Dec-31	M. Green, Withdrawals	2600
	To Cash A/c		2600
	(Being Drawings made)
Dec-31	Supplies Expenses A/c Dr.	4030
	To Computer Supplies A/c		4030
	(Being supplies consumed/used)
Dec-31	Insurance Expenses A/c Dr.	860
	To Repaid Insurance A/c		860
	(Being Insurance expired recorded)
Dec-31	Rent Expenses A/c Dr.	6075
	To Prepaid Rent A/c		6075
	(Being rent expired recorded in the books)
Dec-31	Wages Expenses A/c Dr.	720
	To Wages Payable		720
	(Being wages due but not paid)
Dec-31	Depreciation Expenses A/c Dr.	2290
	To Accumulated Depreciation-Computer Equipment		1570
	To Accumulated Depreciation-Office Equipment		720
	(Being depreciation recorded for 3 months)