Question

Required information The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances: Credits Debits $12,500 6,500 2,500 17,500 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Salaries Payable Common Stock Retained Earnings Totals $ 6,000 8,500 17,500 7,000 $39,000 $39,000 The following is a summary of the transactions for the year: 1. March 12 Provide services to customers, $45,000, of which $19,500 is on account. 2. May 2 Collect on accounts receivable, $16,500. 3. June 30 Issue shares of common stock in exchange for $5,000 cash. 4. August 1 Pay salaries of $8,500 from 2020 (prior year). 5. September 25 Pay repairs and maintenance expenses, $11,500. 6. October 19 Purchase equipment for $6,500 cash. 7. December 30 Pay $1,000 cash dividends to stockholders.

Answer 1

Solution

RED STORM CLEANERS
Post-Closing Trial Balance
December 31, 2021
ACCOUNTS NAME	DEBIT	CREDIT
Cash	$ 32,000.00
Accounts receivable	$    9,500.00
Supplies	$    2,500.00
Equipment	$ 24,000.00
Accumulated depreciation		$    6,000.00
Salary payable		$                 -
Common stock		$ 22,500.00
Retained earnings		$ 39,500.00
Totals	$ 68,000.00	$ 68,000.00

All expenses are deducted from retained earnings and all revenue are added to retained earnings.