Fred Flinstone along with Barney Rubble runs a Winter Snow Removal company. Wilma Flintstone is the office manager for Yabba-Dabba-Do Snow Removal. January will be the first official month that Yabba-Dabba-Do Snow Removal Services begins keeping full accounting records. Wilma learns quickly that she doesn’t have the education to maintain the accounting records for Yabba-Dabba-Do Snow Removal Services. Regrettably, Wilma only attended college for one year, J. Sarge Rock, and never registered for financial accounting classes. As a result, she hired the services of a local CPA Firm, Bedrock CPA, Inc., and discovered she will pay a junior associate, $200 per hour to maintain the accounting records.

Below are the transactions for the month of January 2021. Wilma has provided these transactions to Bedrock CPA. You are the junior associate and responsible for journalizing all transactions, posting to the Ledger, creating a Trial Balance Sheet and Financial Statements.

The following beginning balances exist as of January 1, 2021. Note Payable: 159,000; Building: 159,000. Please use the normal balances to determine the debit or credit of the balances.

Transactions for Yabba-Dabba-Do Snow Removal Services

01/1/2021 (1) Fred borrowed $35,000 with a 7% interest rate from the Bank of Bedrock with a 90-day note payable. Interest will be paid at the end of 90 days. (Hint, Interest will not be recorded until later. Only record the loan of $35,000)

01/1/2021 (2) Paid monthly mortgage of $1000 that includes principal and interest. The principal balance is $159,000 with a 3.75% interest rate.

(3) Received cash from the first client, Brad Stone-Pitt, as a payment towards an uncompleted job. Mr. Stone-Pitt paid $1,500 for snow removal services for the month of January, February, and March.

01/1/2021 (4) Paid rent in 1-year advance for Rent in the amount of $19,020.

01/1/2021 (5) Paid annual Property Insurance bill for $4,000. The property insurance bill is for the period of January 1, 2021 – Dec 31 2021.

01/9/2021 (6) Purchased office supplies (staplers, rock tablets, pencils, etc) of $1500 on the account.

01/10/2021 (7) Received an electric bill for the month of January, $90, that will be paid on Feb 15th.

01/15/2021 (8) Purchased snow equipment for $9,000 with a note payable from John Deere Rock. Since Yabba Dabba Do Snow Removal is a new client, Fred was required to put a down payment of 10% and the remainder will be financed over 12 months

01/21/2021 (9) Performed snow removal services for clients, totaling $10,000 plus sales tax of $575. Received $3,000 in payment. Will obtain remainder within 30 days.

01/22/2021 (10) Fred received an inheritance and invested $30,000 of his personal funds into the company in exchange for common stock.

01/30/2021 (11) Paid salaries to employees, 2 friends of Barney’s, for a total of $7000. These salaries were for the periods of 01/01-01/21.

01/30/2021 (12) Paid Bedrock CPA firm for 4.25 hours of service for the month of January.

01/30/2021 (13) Received and paid phone and internet bill from Verizon for $95.

Requirements

1. Please write the journal entry for each transaction above including a description for THE MONTH OF JANUARY.

2. Please post journal entries to T-Accounts and label the JE with the numbers above.

3. Balance the T-accounts after the above entries are posted.

4. Please prepare a Trial Balance FOR THE MONTH OF JANUARY. Please assume that the beginning balance of all accounts was 0.

Attached are templates to use, account names, and formats for tables. Explanations are helpful if you can.

  
 
 

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Account Numbers Account Titles 101 Cash 102 Account Receivable 103 Supplies 104 Prepaid Rent 105 Prepaid Insurance 106 Building 107 Equipment 108 Account Payable 109 Note Payable 110 Sales Tax Payable 111 Salary Payable 112 Utility Payable 113 Unearned Revenue 114 Interest Payable 115 Capital Stock 116 Revenue 117 Utility Expense 118 Salary Expense 119 Supplies Expense 120 Insurance Expense 121 Interest Expense 122 Rent Expense 123 Professional Service Expense Account Numbers Account Titles 101 Cash 102 Account Receivable 103 Supplies 104 Prepaid Rent 105 Prepaid Insurance 106 Building 107 Equipment 108 Account Payable 109 Note Payable 110 Sales Tax Payable 111 Salary Payable 112 Utility Payable 113 Unearned Revenue 114 Interest Payable 115 Capital Stock 116 Revenue 117 Utility Expense 118 Salary Expense 119 Supplies Expense 120 Insurance Expense 121 Interest Expense 122 Rent Expense 123 Professional Service Expense