Question

SPARKLE CLEANING SERVICE Problem Data For the Month Ended July 31, 2016 Fred Severini opened SPARKLE Cleaning Service on July 1, 2016. During July, the company completed the following transactions. July 1 Stockholders invested cash in the business in exchange for common stock. $15,000 1 Purchased a used cleaning truck on account. $12,000 3 Purchased cleaning supplies on account. $1,800 5 Paid on a one-year insurance policy, effective July 1. $2,100 12 Billed customers for cleaning services. $4,400 18 Paid on amount owed on truck. $4,000 20 Paid employee salaries. $2,000 21 Collected from customers billed on July 12. $2,400 25 Billed customers for cleaning services. $2,200 31 Paid gasoline for the month on the truck. $500 31 Declared and paid a cash dividend. $600 The chart of accounts for SPARKLE Cleaning Service contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gasoline Expense, No. 634 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense.

Answer 1

Hi, Buddy. I think, adjustment are missing. Check again. if yes, convey me. I'll update the answer.

I prepared based on given information.

Credit Sparkle Cleaning Service Journal Entries Month Particulars July 1 Cash Common Stock (To record investment of cash in busiess) Debit $15,000 $ 15,000 $ 12,000 July 1 Equipment Accounts Payable (To record purchase balance on account) $12,000 $ 1,800 July 3 Supplies Accounts Payable (To record purchase balance on account) $ 1,800 $ 2,100 July 5 Prepaid Insurance Cash (To record paid of one year insurance policy) $ 2,100 $ 4,400 July 12 Accounts Receivable Service Revenue (To record service performed on account) $ 4,400

$ 4,000 July 18 Accounts Payable Cash (To record payment creditors on account) $ 4,000 $ 2,000 July 20 Salaries and Wages Expense Cash (To record salaries paid) $ 2,000 $ 2,400 July 21 Cash Accounts Receivable (To record received cash in payment of account) $ 2,400 $ 2,200 July 25 Accounts Receivable Service Revenue (To record service performed on account) $ 2,200 $ 500 July 31 Gasoline Expense Cash (To record gasoline expense paid) $ 500 $ 600 July 31 Dividends Cash (To record dividend paid) $ 600

Sparkle Cleaning Service Trial Balance July 31, 2016 Account Debit Credit Cash $ 8,200 Accounts Receivable $ 4,200 Supplies $ 1,800 Prepaid Insurance $ 2,100 Equipment $ 12,000 Accounts Payable $ 9,800 Common Stock $ 15,000 Dividends $ 600 Service Revenue $ 6,600 Salaries and Wages Expense $ 2,000 Gasoline Expense $ 500 TOTAL $ 31,400 $ 31,400 $ Sparkle Cleaning Service Income Statement For the Year Ended July, 31,2016 Revenues: Service Revenue $ 6,600 Total Revenues $6,600 Expenses: Salaries and Wages Expense $ 2,000 Gasoline Expense $ 500 Total Expenses $ 2,500 Net Income $4,100

Sparkle Cleaning Service Statement of Retained Earnings For the Year Ended July 31,2016 Beginning Retained Earnings $ Add: Net Income $ 4,100 $4,100 Less: Dividends $ 600 Ending Retained Earnings $3,500 $ 16,300 Sparkle Cleaning Service Balance sheet July 31,2016 Assets: Current Assets Cash $ 8,200 Accounts Receivable $ 4,200 Supplies $ 1,800 Prepaid Insurance $ 2,100 Total Current Assets Property plant and Equipment Equipment $ 12,000 Less:Accumulated Depreciation-Building $ Total Property,plant and Equipment Total Assets Liabilities: Current Liabilities Accounts Payable $ 9,800 Total Liabilities Stockholders' Equity: Common Stock $ 15,000 Retained Earnings $ 3,500 Total Stockholders' Equity Total Liabilities and Stockholders' Equity $ 12,000 $ 12,000 $ 28,300 $ 9,800 $ 18,500 $ 28,300 A A

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