Question

The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances: Credits Debits $ 4,200 9,200 3,200 30,000 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Utilities Payable Deferred Revenue Common Stock Retained Earnings Totals $ 6,800 4,800 5,800 0 20,000 9,200 $ 46,600 $46,600 The following is a summary of the transactions for the year: 1. January 24 Provide plumbing services for cash, $17,000, and on account, $62,000. 2. March 13 Collect on accounts receivable, $50,000. 3. May 6 Issue shares of common stock in exchange for $11,000 cash. 4. June 30 Pay salaries for the current year, $ 32,400. 5. September 15 Pay utilities of $5,800 from 2020 (prior year). 6. November 24 Receive cash in advance from customers, $8,800. 7. December 30 Pay $2,400 cash dividends to stockholders.

Answer 1

Final accounts are prepared at the end of an accounting period to verify the profit or loss earned by the business during the year and also to check the financial position of the business in terms of Assets and liabilities. For this, the entries are made and then it will be posted to Ledger. Finally trial balance, income statement and balance sheet is prepared.

Journal entries No. Date General Journal 1 24-Jan Cash Accounts Receivable Service Revenue Debit Credit $17,000 $62,000 $79,000 2 13-Mar Cash Accounts Receivable $50,000 $50,000 3 6-May Cash Common Stock $11,000 $11,000 4 30-Jun Salaries expense Cash $32,400 $32,400 $5,800 5 15-Sep Utilties Payable Cash $5,800 $8,800 6 24-Nov Cash Deferred Revenue $8,800 $2,400 7 30-Dec Dividends Cash $2,400 Adjusting entries 8 31-Dec Depreciation expense Accumulated Depreciation $6,800 $6,800 $2,100 9 31-Dec Supplies expense Supplies $2,100 $6,400 10 31-Dec Deferred Revenue Service Revenue $6,400 11 31-Dec Utilties expense Utilties Payable $6,600 $6,600

General Ledger:

Beg. Bal 24-Jan 13-Mar 6-May 24-Nov Cash 4,200 17,000 30-Jun 50,000 15-Sep 11,000 30-Dec 8,800 32,400 5,800 2,400 End. Bal. 50,400 Accounts Receivable Beg. Bal 9,200 13-Mar 24-Jan 62,000 50,000 End. Bal. 21,200 Beg. Bal Supplies 3,200 31-Dec 1,1001 2,100 End. Bal. Equipment 30,000 Beg. Bal End. Bal 30,000 Accumulated depreciation Beg. Bal 6,800 31-Dec 6,800 End. Bal. 13,600 Accounts payable Beg. Bal 4,800 End. Bal. 4,800 Utilities payable Beg. Bal 5,800 31-Dec End. Bal. 15-Sep 00 5,800 6,600 6,600 Deferred Revenue Beg. Bal 31-Dec End. Bal 8,800 6,400 24-Nov 2,400 Common stock Beg. Bal 6-May End. Bal. 20,000 11,000 31,000

Retained Earnings Beg. Bal 9,200 End. Bal. 9,200 Service Revenue Beg. Bal 31-Dec End. Bal. 79,000 6,400 85,400 Salaries expense Beg. Bal 30-Jun End. Bal. 32,400 32,400 Depreciation expense Beg. Bal 31-Dec 6,800 End. Bal. 6,800 Supplies expense Beg. Bal 31-Dec End. Bal. 2,100 2,100 Utilties expense Beg. Bal 31-Dec End. Bal. 6,600 6,600 Dividends Beg. Bal 30-Dec End. Bal. 2,400 2,400

Adjusted Trial Balance:

Pipers Plumbing Adjusted Trial Balance For the year ended December 31, 2021 Cash 50,400 Accounts Receivable 21,200 Supplies 1,100 Equipment 30,000 Accumulated Depreciation -13,600 Accounts payable 4,800 Utilities payable 6,600 Deferred revenue 2,400 Common stock 31,000 Retained Earnings 9,200 Dividends 2,400 Service Revenue 85,400 Salaries Expense 32,400 Depreciation Expense 6,800 Utilities Expense 6,600 Supplies Expense 2,100 Total 139,400 139,400

Income statement & Classified Balance Sheet:

85,400 Pipers Plumbing Income Statement for the year ended December 31, 2021 Revenues Service revenue Expenses : Salaries Expense 32,400 Depreciation Expense 6,800 Utilities Expense 6,600 Supplies Expense 2,100 Total Expenses Net Income 47,900 37,500 Pipers Plumbing Statement of Retained Earnings for the year ended December 31, 2021 Beginning balance Net income Dividends Ending balance 9,200 37,500 -2,400 44,300 72,700 Pipers Plumbing Balance Sheet At December 31, 2021 Assets Current Assets Cash 50,400 Accounts Receivable 21,200 Supplies 1,100 Total Current Assets Plant, Property and Equipment Equipment 30,000 Accumulated Depreciation -13,600 Total Assets Liabilities and Shareholders' Equity Current Liabilities Accounts payable 4,800 Utilities payable 6,600 Deferred revenue 2,400 Total Liabilities Shareholders Equity Common stock 31,000 Retained Earnings 44,300 Total Shareholders Equity 16,400 89,100 13,800 75,300

Closing entries 12 31-Dec Service revenue Income Summary $85,400 $85,400 $47,900 13 31-Dec Income Summary Salaries Expense Depreciation Expense 14 Utilities Expense Supplies Expense 32,400 6,800 6,600 2,100 37,500 15| 31-Dec Income Summary Retained Earnings 37,500 16 31-Dec Retained Earnings Dividends 2,400 2,400