Ewok-Ackbar opened Ewoks Carpet Cleaners Inc. on March 1. During March, the following transactions were completed. March

Question:

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.

(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.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...