Question: Ewok-Ackbar opened Ewoks Carpet Cleaners Inc. on March 1. During March, the following transactions were completed. March 1, Issued $10,000 of common stock for $10,000
Ewok-Ackbar opened Ewok’s Carpet Cleaners Inc. on March 1. During March, the following transactions were completed.
March 1, Issued $10,000 of common stock for $10,000 cash.
March 1, Purchased used truck for $6,000, paying $4,000 cash and the balance on account.
March 3, Purchased cleaning supplies for $1,200 on account.
March 5, Paid $1,800 cash on one-year insurance policy effective March 1.
March 14, Billed customers $2,800 for cleaning services.
March 18, Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies
March 20, Paid $1,500 cash for employee salaries.
March 21, Collected $1,600 cash from customers billed on March 14.
March 28, Billed customers $2,500 for cleaning services.
March 31, Paid gas and oil for month on truck $200.
March 31, Declared and paid a $700 cash dividend.
The chart of accounts for Ewok’s Carpet Cleaners Inc. contains the following accounts:
No. 101 Cash
No. 112 Accounts Receivable
No. 128 Cleaning Supplies
No. 130 Prepaid Insurance
No. 157 Equipment
No. 158 Accumulated Depreciation - Equipment
No. 201 Accounts Payable
No. 212 Salaries Payable
No. 311 Common Stock
No. 320 Retained Earnings
No. 350 Income Summary
No. 400 Service Revenue
No. 633 Gas & Oil Expense
No. 634 Cleaning Supplies Expense
No. 711 Depreciation Expense
No. 722 Insurance Expense
No. 726 Salaries Expense
Instructions
(a) Journalize and post the March transactions. Use page J1 for the journal and the three column form of account.
(b) Prepare a trial balance at March 31 on a work sheet.
(c) Enter the following adjustments on the work sheet and complete the work sheet.
(1) Earned but unbilled revenue at March 31 was $600.
(2) Depreciation on equipment for the month was $250.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $400 of cleaning supplies on hand at March 31.
(5) Accrued but unpaid employee salaries were $500.
(d) Journalize and post adjusting entries. Use page J2 for the journal.
(e) Prepare the income statement and a retained earnings statement for March and a classified balance sheet at March 31.
(f) Journalize and post closing entries and complete the closing process. Use page J3 for the journal.
(g) Prepare a post-closing trial balance at March 31.
Step by Step Solution
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Mar 1 Cash 10000 Common Stock 10000 Mar 1 Equipment 6000 Cash 4000 Accounts Payable 2000 Mar 3 Cleaning Supplies 1200 Accounts Payable 1200 Mar 5 Prepaid Insurance 1800 Cash 1800 Mar 14 Accounts Recei... View full answer
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Document Format (1 attachment)
68-B-M-A-C-M (586).xlsx
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