Short Comprehensive Problem
Sanlucas, Inc., provides home inspection services to its clients. The company’s trial balance dated June1, 2011, is shown below:
SANLUCAS, INC. TRIAL BALANCE JUNE 1, 2011 | ||
Cash | $ 5,100 |
|
Accounts receivable | 2,600 |
|
Inspection supplies | 800 |
|
Accounts payable |
| $ 850 |
Notes payable |
| 2,000 |
Dividends | 600 |
|
Capital stock |
| 3,000 |
Retained earnings |
| 1,800 |
Inspection revenue |
| 8,350 |
Salaries expense | 4,900 |
|
Advertising expense | 300 |
|
Testing expense | 1,700 |
|
| $16,000 | $16,000 |
Sanlucas engaged in the following transactions in June:
June 4 | Borrowed cash from Community Bank by issuing a $1,500 note payable. |
June 9 | Collected a $1,600 account receivable from Nina Lesher. |
June 10 | Purchased $150 of inspection supplies on account. |
June 17 | Billed home owners $1,650 for inspection services. The entire amount is due on July 17. |
June 25 | Paid WLIR Radio $200 for ads to be aired on June 27. |
June28 | Recorded and paid $1,300 for testing expenses incurred in June. |
June 30 | Recorded and paid June salaries of$1,100. |
Instructions
a. Record the company’s June transactions in general journal form. Include a brief explanation of the transaction as part of each journal entry.
b. Post each entry to the appropriate ledger accounts (use the T account format illustrated in Exhibit 3-8 on page 108).
c. Prepare a trial balance dated June 30, 2011. (Hint: Retained Earnings will be reported at the same amount as on June 1. Accounting for changes in the Retained Earnings account resulting from revenue, expense, and dividend activities is discussed in Chapter 5.)
d. Has the company paid all of the dividends that it has declared? Explain.
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