This is a simulation of the accounting cycle for a service business. You are the professional accountant for Smith Heating and Electric owned by Mike Smith. You have the task of completing the accounting cycle and preparing the financial statements for Smith Heating and Electric which provides mechanical service and installation to both home and business clients (furnace installs and repair, electric systems, etc). The revenue they earn comes from service revenue and the sales of equipment (furnace, water heaters, electrical equipment, etc.). The company uses the Periodic Inventory method.

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B D E 1 2 3 Smith Heating and Electric Trial Balance November 30, 2019 4 No. Account Debit Credit 6 7 101 Bank $ 72,150.00 8 105 Accounts Receivable 22,300.00 9 110 Installation Inventory 62,400.00 10 115 Supplies 6,120.00 11 120 Prepaid Insurance 520.00 12 135 Shop Equipment 18,900.00 13 137 Acc. Amort. Shop Equipment $ 5,670.00 14 170 Automobiles 43,600.00 15 171 Acc. Amort. Automobiles 13,080.00 16 201 Accounts Payable 17,400.00 17 202 Interest Payable 18 205 HST Payable 12,810.00 19 206 HST Recoverable 4,810.00 21 24 25 26 29 31 27222222228-2333 20 210 Loan Payable 3,200.00 215 Mortgage Payable 38,500.00 301 M. Smith, Capital 89,750.00 305 M. Smith, Drawings 33,000.00 401 Service Revenue 132,555.00 402 Sales Revenue 89,500.00 501 Purchases 114,225.00 30 605 502 503 Purchase Discounts 504 Freight-In 601 Advertising Expense Automobile Expense Purchase Returns 620.00 1,460.00 890.00 420.00 7,340.00 620 Amort. Expense - Shop Equipment 36 670 37 675 38 680 39 685 Utilities Expense 40 690 Interest Expense 640 34 650 35 665 Amort. Expense - Automobile Insurance Expense Maintenance Expense Miscellaneous Expense Rent Expense Supplies Expense 1,128.00 325.00 652.00 8,800.00 1,925.00 5,040.00 41 700 42 43 Income Summary $404,545.00 $404,545.00 B D E 1 2 3 Smith Heating and Electric Trial Balance November 30, 2019 4 No. Account Debit Credit 6 7 101 Bank $ 72,150.00 8 105 Accounts Receivable 22,300.00 9 110 Installation Inventory 62,400.00 10 115 Supplies 6,120.00 11 120 Prepaid Insurance 520.00 12 135 Shop Equipment 18,900.00 13 137 Acc. Amort. Shop Equipment $ 5,670.00 14 170 Automobiles 43,600.00 15 171 Acc. Amort. Automobiles 13,080.00 16 201 Accounts Payable 17,400.00 17 202 Interest Payable 18 205 HST Payable 12,810.00 19 206 HST Recoverable 4,810.00 21 24 25 26 29 31 27222222228-2333 20 210 Loan Payable 3,200.00 215 Mortgage Payable 38,500.00 301 M. Smith, Capital 89,750.00 305 M. Smith, Drawings 33,000.00 401 Service Revenue 132,555.00 402 Sales Revenue 89,500.00 501 Purchases 114,225.00 30 605 502 503 Purchase Discounts 504 Freight-In 601 Advertising Expense Automobile Expense Purchase Returns 620.00 1,460.00 890.00 420.00 7,340.00 620 Amort. Expense - Shop Equipment 36 670 37 675 38 680 39 685 Utilities Expense 40 690 Interest Expense 640 34 650 35 665 Amort. Expense - Automobile Insurance Expense Maintenance Expense Miscellaneous Expense Rent Expense Supplies Expense 1,128.00 325.00 652.00 8,800.00 1,925.00 5,040.00 41 700 42 43 Income Summary $404,545.00 $404,545.00