Geog Lav opened Geog Cleaners on March 1, 2014. During March, the following transactions were completed. Mar.

Question:

Geog Lav opened Geog Cleaners on March 1, 2014. During March, the following transactions were completed.

Mar. 1 Issued 10,000 shares of common stock for $15,000 cash.

1 Purchased used truck for $8,000, paying $3,000 cash and the balance on account.

3 Purchased cleaning supplies for $2,000 on account.

5 Paid $2,400 cash on a 6-month insurance policy effective March 1.

14 Billed customers $3,700 for cleaning services.

18 Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies.

20 Paid $1,750 cash for employee salaries.

21 Collected $1,600 cash from customers billed on March 14.

28 Billed customers $4,200 for cleaning services.

31 Paid $350 for gas and oil used in truck during month (use Maintenance and Repairs Expense).

31 Declared and paid a $900 cash dividend.

The chart of accounts for Geog Cleaners contains the following accounts: Cash, Accounts

Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Salaries and Wages Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Maintenance and Repairs Expense, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense.

Instructions

(a) Journalize the March transactions.

(b) Post to the ledger accounts. (Use T-accounts.)

(c) Prepare a trial balance at March 31.

(d) Journalize the following adjustments.

1. Services performed but unbilled at March 31 was $200.

2. Depreciation on equipment for the month was $250.

3. One-sixth of the insurance expired.

4. An inventory count shows $280 of cleaning supplies on hand at March 31.

5. Accrued but unpaid employee salaries were $1,080.

(e) Post adjusting entries to the T-accounts.

(f) Prepare an adjusted trial balance.

(g) Prepare the income statement and a retained earnings statement for March and a classified balance sheet at March 31.

(h) Journalize and post-closing entries and complete the closing process.

(i) 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...
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Accounting Tools for Business Decision Making

ISBN: 978-1118128169

5th edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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