Bill has asked you to prepare financial statements for his first month of operation. The following information relates to the month of May, 2014. (Round all calculations to the nearest whole dollar)
1. On May 2, Bill signed a 1 year, 6% note for $3,500 associated with the purchase of a used truck for the business. The interest will be due with the principle of the note.
2. On May 2, Bill purchased a used truck for $7,000 to use for the lawn care business. He estimates a trade-in value of $500 at the end of the estimated five-year life of the truck.
3. On May 5, Bill purchased a lawn mower for $300 and an aerator for $500. He estimates $0 salvage value for both pieces of equipment and an estimated two-year life for both.
4. On May 6, Bill writes a $600 check for a six month insurance policy that expires October 31, 2014.
Instructions:
1. Using the chart of accounts provided, and the Excel template provided with this assignment, record the adjustments in the Worksheet, calculate the adjusted trial balance and complete the worksheet.
2. Prepare the Income Statement, Statement of Owner's Capital and Balance Sheet for Bill's Lawn Care for May, 2014
3. Prepare journal entries, in good form, to record the May adjusting entries. Explanations are optional. Start with Page 3 of the General Journal for the adjusting entries.
4. Post the journal entries to general ledger accounts. There are already transactions in the ledger for the month, you are adding to those transactions.
5. Prepare and post the closing entries for May, 2014. Start with Page 4 of the General Journal for the closing entries 6. Prepare a post-closing trial balance as of May 31, 2014, for Bill's Lawn Care.
Below is the General Ledger. The rest of the spreadsheet pages do not contain any content aside from headers.

Transcribed Image Text:

80 70 60 50 Ah асгoss 40 pump (n) 30 20 10 0 04 0.08 0.12 0.16 0.20 024 Q. flow rate through pump (f'/s) 41 42 ACCOUNT Prepaid Insurance ACCOUNT NO 130 43 POST BALANCE 44 DATE DESCRIPTION REF. DEBIT CREDIT Debit Credit 2014 MAY 6 45 46 J1 600 600 47 48 49 50 51 52 53 ACCOUNT Equipment ACCOUNT NO 150 54 POST BALANCE 55 DATE DESCRIPTION REF. DEBIT CREDIT Debit Credit 56 2014 57 MAY 2 J1 5,000 5,000 58 3 J1 800 5,800 59 60 61 62 63 64 ACCOUNT Accumulated Depreciation - Equipment POST ACCOUNT NO 155 65 BALANCE 66 DATE DESCRIPTION REF. DEBIT CREDIT Debit Credit 67 68 69 70 71 72 73 74 75 ACCOUNT Accounts Payable ACCOUNT NO 201 76 POST BALANCE 77 DATE DESCRIPTION REF. DEBIT CREDIT Debit Credit 78 79 80