Question

P4-SA Anya Clark opened Anya's Cleaning Service on July 1,2017. During July, the transactions were completed. Anya invested $20,000 cash in the business. July 1 1 Purchased used truck for $12,000, paying $4,000 cash and the balance on 3 5 12 18 account. Purchased cleaning supplies for $2,100 on account. Paid $1,800 cash on a 1-year insurance policy effective July 1. Billed customers $4,500 for cleaning services. Paid $1,500 cash on amount owed on truck and $1,400 on amount owed on 20 21 25 31 31 cleaning supplies. Paid $2,800 cash for employee salaries. Collected $3,400 cash from customers billed on July 12. Billed customers $6,000 for cleaning services. Paid $350 for the monthly gasoline bill for the truck. Withdraw $5,600 cash for personal use. The chart of accounts for Anya's Cleaning Service contains the following accounts: No 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Pay able, No. 212 Salaries and Wages Payable, No. 301 Owner's Capital, No. 306 Owners Drawings, No. 350 Income Summary, No. 400 Service Revenue, No. 631 Supplies Expense No. 633 Gasoline Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense and No. 726 Salaries and Wages Expense. Instructions (a) Journalize and post the July transactions. Use page J1 for the journal and the thre column form of account. (b) Prepare a trial balance at July 31 on a worksheet. (c) Enter the following adjustments on the worksheet and complete the worksheet (1) Unbilled and uncollected revenue for services performed at July 31 were S2. (2) Depreciation on equipment for the month was $500. (3) One-twelfth of the insurance expired. (4) An inventory count shows $600 of cleaning supplies on hand at July 31. (5) Accrued but unpaid employee salaries were $1,000. (d) Prepare the income statement and owner's equity statement for July and a c balance sheet at July 31 (e) Journalize and post adjusting entries. Use page J2 for the journal D Journalize and post closing entries and complete the closing process. Use page the journal. (g) Prepare a post-closing trial balance at July 31.

Answer 1

Page J1 In the books of Anya's Cleaning Service Journal Entries 2 Ledger Folio Date Account Debit Credit 2320/07/17 Salaries and Wages Expense 24 25 26 21/07/17 Cash 27 28 29 25/07/17 Accounts Receivale 30 31 32 31/07/17 Gasoline Expense 726 $2,800 101 To Cash $2,800 (Being salaries paid to staff) 101$3,400 112 To Accounts Receivable $3,400 (Being cash collected from customer) 112 Ş6,000 400 lo Service Revenue $6,000 (Being Bill raised to customer) $350 633 101 To Cash $350 (Being cash paid for gasoline expense) 34 35 31/07/17 Owner's Drawings 36 37 38 39 306 $5,600 101 To Cash $5,600 (Being cash withdrawn by anya for personal use) Total $61,450$61,450

Page 12 In the books of Anya's Cleaning Service Journal Entries 2 Date Account Debit Credit Folio 4 31/07/17 Accountas Receivable 5 112 $2,700 400 $2,700 To Service Revenue (Being Provision for unbilled and uncollected revenue is recorded) 711 $500 158 7 31/07/17 Depreciation Expesne $500 To Accumulated Depreciation-Equrpment (Being provision for depreciation on truck is made) 130 $1,650 722 1031/07/17 Prepaid Insurance To Insurance Expense $1,650 (Being Bifurcation for prepaid insurance made) 12 1331/07/17 Supplies Expense 631 $1,500 126 $1,500 To Supplies (Being used supplies transfred to supplies expense) 15 1631/07/17 Salaries and Wages Expense 17 726 $1,000 201 $1,000 To Accounts Payable (Being Provision for unpaid salary expense made) 19 20 Total

Anya's Cleaning Service Trial Balance as on 31/7/17 Ledger Folio 2 Particulars Debit Credit 3 4Owner's Capital 5 Owner's drwanings 6 Accounts Payable 7 Equipment 8 Accumulated Depereciation- Equipmef 9 Cashh 10 Accountas Receivable 11 Supplies 12 Prepaid Insurance 13 Service Revenue 14 Supplies Expense 15 Gasoline Expense 16 Depreciation Expense 17 Insurance Expense 18 Salaries and Wages Expense 301 306$5,600 201 157Ş12,000 158 101$5,950 $20,000 $8,200 $500 12$9,800 $600 130 $1,650 126 400 $13,200 631$1,500 $350 $500 $150 726 $3,800 633 722 20 Total $41,900$41,900

Anya's cleaning Service 2 Income Statement for the Month of July'17 Particulars 4 Revenue 5 Service Revenue $13,200 7 Revenue Total [A] $13,200 9 Expenses 10 Supplies Expense 11 Gasoline Expense 12 Depreciation Expense 13 Insurance Expense 14 Salaries and Wages Expense 15 16 Expense Total [B] $1,500 $350 $500 $150 $3,800 $6,300 18 Net income [A-B] $6,900

50 51 52 53 Owner's Capital 54 Owner's drwanings Anya's Cleaning Service Owner's Equity Statement Particulars $20,000 -S5,600 $144001 56, 9001 $21,300 56 Profit for the periot 57 Closing Owner's Equity 58

Page J3 In the books of Anya's Cleaning Service 2 Ledger Folio Date Account Debit Credit 400$13,200 631 633 431/07/17 Service Revenue To Supplies Expense To Gasoline Expense To Depreciation Expense To Insurance Expense To Salaries and Wages Expense To Income Summary (Being Inocme and Expense transferred to income summary account) $1,500 $350 $500 $150 $3,800 $6,900 7 722 726 350 10 12 13 Total $13,200$13,200

Anya's Cleaning Service 2 Trial Balance as on 31/7/17(after Closing Entries entries) Ledger Debit Particulars DebitCredii 4 Owner's Capital 301 306 $5,600 350 201 157$12,000 158 101$5,950 112$9,800 126 130 $1,650 $20,000 5 Owner's drwanings 6 Income Summary 7 Accounts Payable $6,900 $8,200 8 Equipment 9 Accumulated Depereciation- 10 Cash 11 Accountas Receivable 12 Supplies 13 Prepaid Insurance 14 15 16 $500 $600 Total $35,600$35,600