Question

The general ledger of Red Storm Cleaners at January 1, 2018, includes the following account balances: Accounts Debits Credits Cash $ 11,000 Accounts Receivable 6,200 Supplies 2,200 Equipment 19,000 Accumulated Depreciation $ 6,600 Salaries Payable 9,100 Common Stock 16,000 Retained Earnings 6,700 Totals $ 38,400 $ 38,400 The following is a summary of the transactions for the year: a. March 12 Provide services to customers, $42,000, of which $19,200 is on account. b. May 2 Collect on accounts receivable, $16,200. c. June 30 Issue shares of common stock in exchange for $5,000 cash. d. August 1 Pay salaries, $24,200 (of which $9,100 is for salaries payable in 2017). e. September 25 Pay repairs and maintenance expenses, $11,200. f. October 19 Purchase equipment for $6,200 cash. g. December 30 Pay $1,000 cash dividends to stockholders. The following information is available for the adjusting entries. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $3,200. Office supplies remaining on hand at the end of the year equal $1,200.

Answer 1