ACR$4\mathrm{.}2$ Financial Statement Lars Linken opened Lars Cleaners on March $1,2022.$ During March,

the following transactions were completed.

Mar. $1$ Owner invested $$15,000$ cash in the company.

$1$ Borrowed $$6,000$ cash by signing a $6-$month, $6\%,$$$6,000$ note payable. Interest will be paid

the first day of each subsequent month.

Purchased used truck for $$8,000$ cash.

Paid $$1,500$ cash to cover rent from March $1$ through May $31.$

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

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

Billed customers $$3,700$ for cleaning services performed.

Paid $$500$ on amount owed on cleaning supplies.

Paid $$1,750$ cash for employee salaries.

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

Billed customers $$4,200$ for cleaning services performed.

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

Expense$).$

$31$ Owner withdrew $$900$ cash from the company.

The chart of accounts for Lars Cleaners contains the following accounts: Cash, Accounts Receivable, Sup$-$

plies, Prepaid Insurance, Prepaid Rent, Equipment, Accumulated Depreciation$-$Equipment, Accounts

Payable, Salaries and Wages Payable, Notes Payable, Interest Payable, Owner's Capital, Owner's Drawings,

Income Summary, Service Revenue, Maintenance and Repairs Expense, Supplies Expense, Depreciation

Expense, Insurance Expense, Salaries and Wages Expense, Rent Expense, and Interest 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.

Services performed but unbilled and uncollected at March $31$ were $$200.$

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

One$-$sixth of the insurance expired.

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

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

One month of the prepaid rent has expired.

One month of interest expense related to the note payable has accrued and will be paid April $1.$

$($Hint: Use the formula from Illustration $3\mathrm{.}21$ to compute interest.$)$

e$.$ Post adjusting entries to the T$-$accounts.

f$.$ Prepare an adjusted trial balance.

g$.$ Prepare the income statement and an owner's equity 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 $31.$

Complete all steps in accounting cycle.

$3$ Paid $$2,400$ cash on a $6-$month insurance policy effective March $1.$

Owner withdrew $$900$ cash from the company.