This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 4-36 of Chapter 4. Lawlor Lawn Service has also begun selling plants that it purchases from a wholesaler. During June, Lawlor Lawn Service completed the following transactions:
Jun 2 Completed lawn service and received cash of $800.
5 Purchased 110 plants on account for inventory, $304, plus freight in of $15.
15 Sold 60 plants on account, $600 (cost $174).
17 Consulted with a client on landscaping design for a fee of $250 on account.
20 Purchased 120 plants on account for inventory, $384.
21 Paid on account, $400.
25 Sold 110 plants for cash, $990 (cost $337).
30 Recorded the following adjusting entries:
Depreciation $30
Physical count of plant inventory, 30 plants (cost $96)
Requirements
1. Open the following selected T-accounts in the ledger: Cash, Accounts receivable, Lawn supplies, Plant inventory, Equipment, Accumulated depreciation— equipment, Accounts payable, Salary payable, Common stock, Retained earning, Dividends, Income summary, Service revenue, Sales revenue, Cost of goods sold, Salary expense, Rent expense, Utilities expense, Depreciation expense—equipment, and Supplies expense.
2. Journalize and post the June transactions. Key all items by date. Compute each account balance, and denote the balance as Bal.
3. Journalize and post the closing entries. Denote each closing amount as Clo. After posting all closing entries, prove the equality of debits and credits in the ledger.
4. Prepare the June income statement of Lawlor Lawn Service. Use the single-step format.