Question

#	Day	Description
1	1	Issued $9,000 of common stock for $9,000 of cash.
2	1	Purchased used truck for $6,000, paying $3,000 in cash and the balance on account.
3	3	Purchased cleaning supplies for $900 on account.
4	5	Paid $1,200 cash on a 1-year insurance policy, effective July 1.
5	12	Billed customers $2,500 for cleaning services.
6	13	Brett got a phone call from a manager of a large office building (Axis Building). The manager asked Brett to prepare a bid sheet for washing all of his windows 4 times per month.
7	18	Paid $1,000 cash on amount owed on truck and $500 on amount owed on cleaning supplies.
8	20	Paid $1,200 cash for employee salaries.
9	20	Brett met with the manager of the large office building (Axis Building) and submitted a bid of $5,500 for complete window washing maintenance 4 times per month. The manager liked the bid but had to discuss this large a contract with the owner. Brett is almost sure the work will come in starting August 1.
10	21	Collected $1,400 cash from customers billed on July 12.
11	25	Billed customers $2,000 for cleaning services.
12	26	Brett got a phone call from the manager of the Axis Building. The owner was willing to pay $5,000 per month for 4 window washings. Brett considered the offer and said it seemed acceptable for him.  The manager said to bring over the contract and start during the week of August 5th.
13	31	Paid cash for gas and oil for month for truck of $200.
14	31	When he picked up the truck after servicing the maintenance man told him the truck should be winterized before November.  The cost for all the work would be $75. Brett made an appointment for winterization of the truck on September 13.
15	31	Declared and paid a $300 dividend.
16	31	An employee approached Brett with a salary request.  The employee was willing to work for $3 less an hour if Brett would pay the salary ‘under the table’. The employee’s spouse had a good job and the salary the employee was getting would put the family into a new income tax bracket. The employee was a good employee and would have to quit if Brett did not oblige.  Brett saw the savings opportunity but said he’d have to talk to his advisor.

In addition the following adjustments were necessary

#	Day	Description
17	31	Services provided but unbilled and uncollected at July 31 were $1,100.
18	31	Depreciation on equipment for month was $200.
19	31	One-twelfth of the insurance expired.
20	31	An inventory count shows $600 of cleaning supplies on hand.
21	31	Accrued but unpaid employee salaries were $400.

Create a Trial Balance/ or General entries/or T-Accounts

Answer 1

Part 1: Journal entries for the month of July

Part 2: Ledger accounts/ T-Accounts

Part 3: Trail balance

Part 4 : Notes

Part 1: Journal entries for the month of July

#	Day	Particulars	Debit $	Credit $
1	1	Cash A/c	9000
		To Common Stock A/c		9000
		(Being common stock issued)
2	1	Truck A/c	6000
		To Cash A/c		3000
		To Creditor A/c (for truck)		3000
		(Being truck purchased and partly paid in cash)
3	3	Cleaning supplies Stock	900
		To Creditor A/c (for Cleaning supplies)		900
		(Being cleaning supplies purchased)
4	5	Insurance Policy	1200
		To Cash A/c		1200
		(Being Insurance policy with effctive from July 1st)
5	12	Accounts receivable	2500
		To Cleaning service revenue		2500
		( Being service provided and revenue recorded)
6	13	No entry- See note 1
7	18	Creditor A/c (for truck)	1000
		Creditor A/c (for Cleaning supplies)	500
		To Cash		1500
		(Being cash paid partly for truck purchase and cleaning supplies)
8	20	Salaries	1200
		To Cash		1200
		( Being salaries paid)
9	20	No entry- See note 1
10	21	Cash	1400
		To Accounts receivable		1400
		( Being cash received from Debtors)
11	25	Accounts receivable	2000
		To Cleaning service revenue		2000
		( Being service provided and revenue recorded)
12	26	No entry- See note 1
13	31	Gas & Oil expenses	200
		To Cash		200
		( Being Gas and oil expenses paid in cash)
13	31	No entry - See Note 2
15	31	Dividend expense	300
		To Cash		300
		( Being dividends declared and paid in cash)
16	31	No entry- See Note 3
Adjustments
17	31	Unbilled revenue (Asset)	1100
		To Unbilled revenue (Income)		1100
		(Being Services provided but unbilled and uncollected at July 31)
18	31	Depreciation	200
		To Equipment		200
		(Depreciation on equipment i.e truck for the July month)
19	31	Insurance expense	100
		To Insurance Policy		100
		(Being One-twelfth of the insurance expired.)
20	31	Cleaning supplies expense	300
		To Cleaning supplies Stock		300
		(Being inventory consumed debited to expense account)
21	31	Salaries	400
		To Salaries payable		400
		(Being accrued saalries recorded)

Part 2: T Accounts/Ledgers

	Cash A/c
Particulars	$	Particulars	$
To Common Stock A/c	9000	By Truck	3000
To Accounts receivable	1400	By Insurance policy	1200
		By Gas & Oil expense	200
		By Dividend expense	300
		By Creditors	1000
		By Creditors	500
		By Salaries	1200
		By balance c/d	3000
	10400		10400
	Common Stock
Particulars	$	Particulars	$
		By Cash	9000
To balance c/d	9000
	9000		9000
	Truck
Particulars	$	Particulars	$
To Cash A/c	3000	By Depreciation	200
To Creditor A/c (for truck)	3000	By balance c/d	5800
	6000		6000
	Creditors
Particulars	$	Particulars	$
To Cash	1000
To Cash	500	To Creditor A/c (for truck)	3000
To balance c/d	2,400	By Cleaning supplies stock	900
	3900		3900
	Cleaning supplies Stock
Particulars	$	Particulars	$
To Creditor A/c	900	By Cleaning supplies expense	300
		By balance c/d	600
	900		900

	Insurance Policy
Particulars	$	Particulars	$
To Cash A/c	1200	By Insurance expense	100
		By balance c/d	1100
	1200		1200
	Accounts receivable
Particulars	$	Particulars	$
To Cleaning service revenue	2500	By Cash	1400
To Cleaning service revenue	2000	By balance c/d	3100
	4500		4500
	Cleaning service revenue
Particulars	$	Particulars	$
		By Accounts receivable	2500
To balance c/d	4500	By Accounts receivable	2000
	4500		4500
	Salaries
Particulars	$	Particulars	$
To Cash	1200
To Salaries payable	400	By balance c/d	1600
	1600		1600
	Gas & Oil expense
Particulars	$	Particulars	$
To Cash	200	By balance c/d	200
	200		200
	Dividend expense
Particulars	$	Particulars	$
To Cash	300	By balance c/d	300
	300		300

	Unbilled revenue(Asset)
Particulars	$	Particulars	$
To Unbilled revenue (Income)	1100	By balance c/d	1100
	1100		1100
	Unbilled revenue(Income)
Particulars	$	Particulars	$
To balance c/d	1100	By Unbilled revenue(Asset)	1100
	1100		1100
	Depreciation
Particulars	$	Particulars	$
To Truck	200
(i.e on equipment)		By balance c/d	200
	200		200
	Insurance expense
Particulars	$	Particulars	$
To Insurance Policy	100
		By balance c/d	100
	100		100
	Cleaning supplies expense
Particulars	$	Particulars	$
To Cleaning supplies Stock	300
		By balance c/d	300
	300		300
	Salaries Payable
Particulars	$	Particulars	$
		By Salaries	400
To balance c/d	400
	400		400

Part 3 Trial balance
Particulars	Debit	Credit
Cash	3,000
Common Stock		9,000
Truck	5,800
Creditors		2,400
Cleaning supplies Stock	600
Insurance Policy	1,100
Accouns receivable	3,100
Cleaning service revenue		4,500
Salaries	1,600
Gas & Oil expense	200
Dividend expense	300
Unbilled revenue(Asset)	1,100
Unbilled revenue(income)		1,100
Depreciation	200
Insurance expense	100
Cleaning supplies expense	300
Salaries Payable		400
Total	17,400	17,400

Part 4 Notes:

1. Per the discussions that Brett has with Manager, the service would come into force with effect from August 5th, Therefore no journal entries have to be accounted in the mont of july.

2. The salary negotiations are still under the discussions and hence no entry would come in the july month.