Problem 1

RK Management opened a new office on May 1, 2012. During May, the following transactions were completed.

May1.	Issued 15,000 shares of common stock for $25,000 cash.
1	Purchased used truck for $15,000, paying $7,000 cash and the balance on account.
3	Purchased office supplies for $2,500 on account.
5	Paid $2,100 cash on a 6-monthinsurance policy effective May 1.
14	Billed clients $5,700 for delivering good services.
18	Paid $8,000 cash on amount owed on truck and $500 on amount owed on store supplies.
20	Paid $3,500 cash for employee salaries.
21	Collected $1,600 cash from clientsbilled on May 14.
28	Billed customers $4,200 for delivering services.
31	Paid $350 for utility bills.
31	Declared and paid a $900 cash dividend.

The chart of accounts for RK Management contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated DepreciationEquipment, Accounts Payable, Salaries and Wages Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Utility Expense, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense.

Instructions

(a)	Journalize the Maytransactions.
(b)	Post to the ledger accounts. (Use T accounts.)

(c)

Prepare a trial balance at May 1.

(d)

Journalize the following adjustments.

1.	Earned but unbilled revenue at May 31 was $500.
2.	Depreciation on equipment for the month was $450.
3.	One-sixth of the insurance expired.
4.	An inventory count shows $380 of store supplies on hand at May 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 May and a classified balance sheet at May 31.
(h)	Journalize and post-closing entries and complete the closing process.

(i)	Prepare a post-closing trial balance at May31.