Question

MJH repair services engaged in the following transactions:

May       1 Began business by issuing common stock for cash, $10,000.

1 Paid this month’s rent, $850

1Paid the premium on a one year insurance policy, $960

2 Purchased $8400 of repair equipment with $1200 in cash and $7200 on account

5 Purchased repair supplies on credit, $936

8 Paid cash for an advertisement, $120

15 Received $800 in repair revenue

21 Paid accounts payable $450

31 Received cash revenue, $1950

31 Paid a dividend, $600

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Adjusting Entries

1. a) One month’s insurance has expired
2. b) Repair supplies ending inventory is $338
3. c) Estimated depreciation is $140

Directions

1. Use these accounts: Cash, Prepaid Insurance, Repair Supplies, Repair Equipment, Accumulated Depreciation, Accounts Payable, Common Stock, Retained Earnings, Dividends, Repair Revenue, Store Rent Expense, Advertising Expense, Insurance Expense, Repair Supplies Expense, and Depreciation Expense
2. Record the journal entries and adjusting entries.
3. Post to the T accounts.
4. Make a trial balance.
5. Do the three financial statements.
6. Do the closing entries.

Answer 1

1 2 3 4 5 6 7 MJH Repair service Journal entries Date Account Title May-01 Cash Common stock May-01 Prepaid insurance Cash May-02 Repair equipment Cash Account payble Debit credit 10000 10000 960 960 8400 1200 7200 8 9 10 11 12 13 936 14 936 15 120 16 120 17 800 18 800 19 450 20 450 21 1950 22 May-05 Repair supplies Account payble May-08 Advertising expense Cash May-15 Cash Repair revenue May-21 Account payble Cash May-31 Cash Repair revenue May-31 Dividends Cash Adjusting entry Insurance expense 960/12 Prepaid insurance Repair supplies expense Repair supplies Depreciation Accumulated depreciation 1950 23 600 24 600 25 80 80 26 a 27 28 b 29 338 338 30 C 140 31 140 32 33 34 35

T Accounts Cash Debit Common stock Debit 10000 Credit 960 1200 Credit 10000 10000 800 Balance 120 1950 9420 Balance 450 600 3330 Prepaid insurance Debit Credit Repair equipment Debit 8400 8400 Credit 80 Balance 960 Balance 880 Account payble Debit 450 Advertising expense Debit Credit = Repair supplies Debit 936 598 Credit 338 7200 120 936 Balance Balance 120 7686 Balance Repair revenue Debit Dividends Debit 600 Credit Credit 800 1950 2750 Balance Balance insurance expenses Debit 80 Credit 600 Repair supplies expense Debit Credit 338 338 Balance 80 Balance Depreciation expense Debit Credit Accumulated depreciation Debit Credit 140 140 Balance 140 Balance 140 DO X

Trial balance May-31 Debit Credit 9420 598 880 8400 140 7686 10000 Cash Repair Supplies Prepaid insurance Repair equipments Accumulated depreciation Account payble Common stock Dividends Repair revenue Advertising expense Insurance expenses Repair supplies expenses Depreciation expenses Total 600 2750 120 80 338 140 20576 20576

20 21 INCOME STATEMENT 22 May-31 23 2,750 24 25 26 27 Repair revenue expenses insurance expenses Repair Supplies expenses ADVERTISING EXPENSES Depreciation Expense Total operating expenses NET INCOME 80 338 120 140 28 29 30 678 2,072 31

41 42 43 44 Statement of retained earnings Bal.Beg Net Income Dividends Balance at end 0 2072 600 1472 45 46 47 48

2 3 4 5 9420 6 598 Balance sheet Assets Current assets cash Repair Supplies Prepaid insurance Total current assets Property, plant and equipment Repair equipments Less Accumulated Dep. 7 880 8 10898 9 10 8400 140 11 8260 Hum Toon SEEMS 999 San N 12 13 14 19158 15 Total assets Current liability Account payable 16 7686 7686 17 18 19 20 Total current liability Stockholders equity comman stock retained earnings Total liability 21 10000 1472 19158 22 23

1 Closing entry 2 3 Date Account title and explaination Debit Credit 4 5 2750 6 2750 7 8 639300 Repair revenue Income summary (To close revenue account) Income summary Repair supplies expense Depreciation expense insurance expenses Advertising expense 9 338 140 10 11 80 12 120 13 14 15 2072 16 2072 (To close expense accounts) Income summary Retained earnings (To close net income) ) Retained earnig Dividend 17 18 600 19 600 20 21 22 NOTE - PLEASE UPVOTE IT SHALL BE A GREAT FAVOR THANKS 23 24 25 26 27 28 29 30 31

Answer 2

Journal entry