Lars Linken opened Riverbed Cleaners on March 1, 2017. During March, the followi
ID: 2335070 • Letter: L
Question
Lars Linken opened Riverbed Cleaners on March 1, 2017. During March, the following transactions were completed.
The chart of accounts for Riverbed Cleaners contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Rent, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Salaries and Wages Payable, Notes Payable, Interest Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Maintenance and Repairs Expense, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Rent Expense, and Interest Expense.
Prepare a trial balance at March 31.
Mar. 1 Issued 10,200 shares of common stock for $15,300 cash. 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. 1 Purchased used truck for $8,200 cash. 2 Paid $1,500 cash to cover rent from March 1 through May 31. 3 Paid $2,400 cash on a 6-month insurance policy effective March 1. 6 Purchased cleaning supplies for $2,040 on account. 14 Billed customers $3,770 for cleaning services performed. 18 Paid $510 on amount owed on cleaning supplies. 20 Paid $1,790 cash for employee salaries. 21 Collected $1,630 cash from customers billed on March 14. 28 Billed customers $4,280 for cleaning services performed. 31 Paid $360 for gas and oil used in truck during month (use Maintenance and Repairs Expense). 31 Declared and paid a $920 cash dividend.Explanation / Answer
Trial Balance at March 31 Account Titles Debit Credit Cash $7,250 Accounts Receivable $6,420 Supplies $2,040 Prepaid Insurance $2,000 Prepaid Rent $1,000 Equipment $8,200 Accounts Payable $1,530 Notes payable $6,000 Interest payable $30 Common Stock $15,300 Dividends $920 Service Revenue $8,050 Maintenance and repair expense $360 Insurance expense $400 Salaries and wages expense $1,790 Rent Expense $500 Interest expense $30 Total $30,910 $30,910 Interest on Notes payable=6000*6%*1/12=30 Adjustment entry for Interest is included in above trial balance, rest relating to depreciation, supplies are to be made Rent for March is charged to rent expense and for april and may recorded in prepaid rent Insurance for march charges to expense account and balance $2000 recorded i in prepaid insurance Rent per month = 1500/3 = $500 Prepaid rent = 1500-500 = 1000 Insurance per month = 2400/6=$400 Prepaid insurance = 2400-400=2000
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