Roth Contractors Corporation was incorporated on December 1,
2019 and had the following transactions during December:
Part A
a.
Issued common stock for $5,000 cash
b.
Paid $1,200 cash for three months’ rent: December 2019; January and
February 2020
c.
Purchased a used truck for $10,000 on credit (recorded as an
account payable)
d.
Purchased $1,000 of supplies on credit. These are expected to be
used during the month (recorded as expense)
e.
Paid $1,800 for a one-year truck insurance policy, effective
December 1
f.
Billed a customer $4,500 for work completed to date
g.
Collected $800 for work completed to date
h.
Paid the following expenses in cash: advertising, $350; interest,
$100; telephone, $75; truck operating, $425; wages, $2,500
i.
Collected $2,000 of the amount billed in f above
j.
Billed customers $6,500 for work completed to date
k.
Signed a $9,000 contract for work to be performed in January
2020
l.
Paid the following expenses in cash: advertising, $200; interest,
$150; truck operating, $375; wages, $2,500
m.
Collected a $2,000 advance on work to be done in January (the
policy of the corporation is to record such advances as revenue at
the time they are received)
n.
Received a bill for $100 for electricity used during the month
(recorded as utilities expense).
Required:
5. Prepare all necessary adjusting entries. General ledger account numbers and descriptions are not necessary.
7. Prepare an adjusted trial balance at December 31.
8. Assume the fiscal year-end is December 31, 2019. Prepare an income statement, statement of changes in equity, and balance sheet.
9. Prepare closing entries and a post-closing trial balance at December 31, 2019
Journal Entries
Transactions | Journal Entries | Dr. ($) | Cr. ($) |
a | cash | 5000 | |
To common stock | 5000 | ||
b | prepaid rent | 1200 | |
To cash | 1200 | ||
c | truck | 10000 | |
To accounts payable | 10000 | ||
d | supplies | 1000 | |
To accounts payable | 1000 | ||
e | prepaid insurance | 1800 | |
To cash | 1800 | ||
f | accounts receivable | 4500 | |
To repair revenue | 4500 | ||
g | cash | 800 | |
To repair revenue | 800 | ||
h | advertising expenses | 350 | |
interest expenses | 100 | ||
telephone expenses | 75 | ||
truck operating expenses | 425 | ||
wages expenses | 2500 | ||
To cash | 3450 | ||
i | cash | 2000 | |
To accounts receivable | 2000 | ||
j | accounts receivable | 6500 | |
To repair revenue | 6500 | ||
k | no entry | ||
l | advertising expenses | 200 | |
interest expenses | 150 | ||
truck operating expenses | 375 | ||
wages expenses | 2500 | ||
To cash | 3225 | ||
m | cash | 2000 | |
To repair revenue | 2000 | ||
n | utilities expenses | 100 | |
To accounts payable | 100 |
T-accounts
cash | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
a | 5000 | 0 | 5000 |
b | 0 | 1200 | 3800 |
e | 0 | 1800 | 2000 |
g | 800 | 0 | 2800 |
h | 0 | 3450 | -650 |
i | 2000 | 0 | 1350 |
l | 0 | 3225 | -1875 |
m | 2000 | 0 | 125 |
accounts receivable | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
f | 4500 | 0 | 4500 |
i | 0 | 2000 | 2500 |
j | 6500 | 0 | 9000 |
prepaid insurance | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
e | 1800 | 0 | 1800 |
prepaid rent | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
b | 1200 | 0 | 1200 |
truck | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
cash | 10000 | 0 | 10000 |
accounts payable | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
c | 0 | 10000 | 10000 |
d | 0 | 1000 | 11000 |
n | 0 | 100 | 11100 |
common stock | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
a | 0 | 5000 | 5000 |
repair revenue | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
f | 0 | 4500 | 4500 |
g | 0 | 800 | 5300 |
j | 0 | 6500 | 11800 |
m | 0 | 2000 | 13800 |
advertising expenses | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
h | 350 | 0 | 350 |
l | 200 | 0 | 550 |
interest expenses | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
h | 100 | 0 | 100 |
l | 150 | 0 | 250 |
telephone expenses | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
h | 75 | 0 | 75 |
truck operating expenses | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
h | 425 | 0 | 425 |
l | 375 | 0 | 800 |
utilities expenses | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
n | 100 | 0 | 100 |
wages expenses | |||
transactions | Dr. ($) | Cr. ($) | Balance ($) |
h | 2500 | 0 | 2500 |
l | 2500 | 0 | 5000 |
Ans: Roth Contractors Corporation was incorporated on December 1, 2019
Journal Entries
Date | Particulars | Debit ($) | Credit ($) | |
a) |
Cash A/c Dr. To Common Stock A/c (being entry for issue of common stock) |
5,000 | 5,000 | |
b) |
Rent Expenses A/c Dr. Prepaid Rent Expenses A/c Dr. To Cash A/c (Being Entry for payment of Rent For December , January and February) |
400 800 |
1,200 | |
c) |
Truck A/c Dr. To Account payable A/c (being Entry for Purchase of Truck on credit) |
10,000 | 10,000 | |
d) |
Supplies A/c Dr. To Account payable A/c (being entry for purchase of Supplies) |
1,000 | 1,000 | |
e) |
Insurence Expenses A/c Dr. Prepaid Insurence A/c Dr. To Cash A/c (being entry for Insurence premium paid) |
150 1,650 |
1,800 | |
f) |
Sales A/c Dr. To Account receivable A/c (Being entry for Sales accounted for the bill raised to the customer) |
4,500 | 4,500 | |
g) |
Cash A/c Dr. To Account Receivable A/c (being cash from Account Receivable A/c ) |
800 | 800 | |
h) |
Advertisement expenses A/c Dr. Truck Operating Expenses A/c Dr. Interest A/c Dr. Telephone Expenses A/c Dr. Wages A/c Dr. To Cash A/c (Being Expenses Paid) |
350 425 100 75 2,500 |
3,450 | |
i) |
Cash A/c Dr. To Account receivable a/c (being Cash Received from Account receivable) |
2,000 | 2,000 | |
j) |
Sales A/c Dr. To Account receivable A/c (Being entry for Sales accounted for the bill raised to the customer) |
6,500 | 6,500 | |
k) | No Entry | |||
l) |
Advertisement expenses A/c Dr. Truck Operating Expenses A/c Dr. Interest A/c Dr. Wages A/c Dr. To Cash A/c (Being Expenses Paid) |
200 375 150 2,500 |
3,225 | |
m) |
Cash A/c Dr. To Sales A/c (Being Cash received as advance for the contract to be started in January) |
2,000 | 2,000 | |
n) |
Utility expense A/c Dr. To Account Payable A/c (being Entry for electricity bill for the month of December) |
100 | 100 | |
q) |
Cost of goods sold A/c Dr. To Supplies A/c ( being entry for use of Supplies ) |
650 | 650 | |
r) |
Sales A/c Dr. To Unearned revenue A/c (Being Entry for recording unearned revenue) |
2,000 | 2,000 | |
s) |
Wages A/c Dr. To Accounts payable A/c ( being entry for the recording wages for 29,30,31 of December) |
1,500 | 1,500 | |
t) |
Depreciation A/c Dr. To Accumulated Depreciation A/c ( being Entry for Recording Depreciation through Accumulated Depreciation A/c ) |
(10,000/4)*(1/12) | 208 | 208 |
u) |
Tax Expenses A/c Dr. To Provision For Tax A/c (being Tax expenses recorded) |
500 | 500 |
2) Trial Balance
Particulars | Dr. ($) |
Cr.($) |
||
Cash | (5,000-1,200-1,800+800-3,450+2,000-3,225+2,000) | 125 | ||
Account receivable | (4,500-800-2,000+6,500) | 8,200 | ||
Account payable | (10,000+1,000+1,500+100) | 12,600 | ||
Cost of Goods sold | 650 | |||
Tax |
500 | |||
Accumulated Depreciation | 208 | |||
Truck | 10,000 | |||
Unearned revenue | 2,000 | |||
Provision for tax | 500 | |||
Truck Operating Expenses | 425+375 | 800 | ||
Sales | 4,500+6,500+2,000-2,000 | 11,000 | ||
Supplies | 350 | |||
Advertisement Expenses |
350+200 | 550 | ||
Telephone expenses | 75 | |||
Interest | 250 | |||
Wages | (2,500+2,500+1,500) | 6,500 | ||
Common Stock | 5,000 | |||
Depreciation | 208 | |||
Prepaid Insurence | 1,650 | |||
Prepaid Rent | 800 | |||
Rent Expenses | 400 | |||
Insurence Expenses | 150 | |||
Utility expense | 100 | |||
Total | 31,308 | 31,308 |
3)
Income statement
Particulars | Amount ($) | |
Sales | 11,000 | |
Less |
||
Cost of Goods Sold | 650 | |
Advertisement expenses | 550 | |
Telephone expenses | 75 | |
Utility expense | 100 | |
Rent Expenses | 400 | |
Insurence Expenses | 150 | |
Depreciation | 208 | |
Wages | 6,500 | |
Interest | 250 | |
Tax | 500 | |
Truck Operation expenses | 800 | |
Net Income | 817 |
Financial Statement
Particulars | Amount ($) | |
Common Stock And Liabilities | ||
Common Stock | 5,000 | |
Retained Earnings | 817 | |
Account payable | 12,600 | |
Provision for tax | 500 | |
Unearned revenue | 2,000 | |
Total | 20,917 | |
Assets | ||
Truck | 10,000 | |
Accumulated depreciation | (208) | 9,792 |
Prepaid rent | 800 | |
Prepaid Insurence | 1650 | |
Supplies | 350 | |
Cash | 125 | |
Account Receivable | 8,200 | |
Total | 20,917 |
4) Closing Journal Entries
Date | Particulars | Dr.($) | Cr.($) | |
Profit and Loss A/c Dr. To Cost of Goods Sold A/c To Advertisement Expenses A/c To Utilities Expenses A/c To Truck operation Expenses A/c To Telephone Expenses A/c To Rent Expenses A/c To Insurance Expenses A/c To Interest A/c To wages A/c To Depriciation A/c To Tax A/c (Being closing entry passed) |
10,183 |
650 550 100 800 75 400 150 250 6,500 208 500 |
||
Sales A/c Dr. To Profit and Loss A/c (being Closing entry passed) |
11,000 | 11,000 |
Post- Closing Trial Balance
Particulars | Dr. ($) |
Cr.($) |
||
Cash | (5,000-1,200-1,800+800-3,450+2,000-3,225+2,000) | 125 | ||
Account receivable | (4,500-800-2,000+6,500) | 8,200 | ||
Account payable | (10,000+1,000+1,500+100) | 12,600 | ||
Cost of Goods sold | ||||
Tax |
||||
Accumulated Depreciation | 208 | |||
Truck | 10,000 | |||
Unearned revenue | 2,000 | |||
Provision for tax | 500 | |||
Truck Operating Expenses | ||||
Sales | ||||
Supplies | 350 | |||
Advertisement Expenses |
||||
Telephone expenses | ||||
Interest | ||||
Wages | ||||
Common Stock | 5,000 | |||
Depreciation | ||||
Prepaid Insurence | 1,650 | |||
Prepaid Rent | 800 | |||
Rent Expenses | ||||
Insurence Expenses | ||||
Profit And Loss A/c | 817 | |||
Total | 21,125 | 21,125 |
* I am seriously struggling with this accounting class, and I have no idea where or how to even start this assignment. Roth Contractors Corporation was incorporated on December 1, 2019 and had the following transactions during December: Part A a. Issued common stock for $5,000 cash b. Paid $1,200 cash for three months’ rent: December 2019; January and February 2020 c. Purchased a used truck for $10,000 on credit (recorded as an account payable) d. Purchased $1,000 of supplies...
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