Cissi Jean Oliver opened Cleaning Angels, Inc. on April 1, 2017. During April, t

Question

Cissi Jean Oliver opened Cleaning Angels, Inc. on April 1, 2017. During April, the following transactions were completed: Issued 5,000 shares of Cleaning Angels common stock for $13,000. Each share has a $1.50 par. pr 3 3 Borrowed $8,000 on a 2-year, 6% note payable. Paid $9,020 to purchase used floor and window cleaning equipment from a company going out of business ($4,820 was for the floor equipment and $4,200 for the window equipment). 3 3 Paid $220 for April Internet and phone service. 3 Purchased cleaning supplies for $980 on account. Hired 4 employees. Each will be paid $480 per 5-day work week (Monday- 4 Friday). Employees will begin working on Monday, April 10 Obtained insurance coverage for $9,840 per year. Coverage runs from April 1, of coverage. 5 2017, through March 31, 2018. Cissi Jean paid $2,460 cash for the first quarter Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Cissi Jean sold the window cleaning equipment for $3,950 cash. 5

Explanation / Answer

Date Account Debit Credit Apr 3 Cash 13000 Apr 3 Additional Paid Up Capital 5500 Apr 3 Common Stock 7500 Apr 3 Cash 8000 Apr 3 Long Term Note Payable 8000 Apr 3 Floor Equipment 4820 Apr 3 Window Equipment 4200 Apr 3 Cash 9020 Apr 3 Telephone Expense 220 Apr 3 Cash 220 Apr 3 Cleaning Supplies 980 Apr 3 Cash 980 Apr 5 Prepaid Insurance 9840 Apr 5 Cash 2460 Apr 5 Accounts Payable 7380 Apr 5 Cash 3950 Apr 5 Loss on Sale of Window Equipment 250 Apr 5 Window Equipment 4200 Apr 17 Accounts Receivable 3900 Apr 17 Cleaning Service 3900 Apr 17 Cash 540 Apr 17 Cash Discount 60 Apr 17 Unearned Clearning Service 600 Apr 18 Accounts Payable 300 Apr 18 Cash 300 Apr 20 Treasury Stock 900 Apr 20 Cash 900 Apr 24 Accounts Receivable 4300 Apr 24 Cleaning Service 4300 Apr 24 Wages Expense 3840 Apr 24 Cash 3840 Apr 25 Cash 2500 Apr 25 Accounts Receivable 2500 Apr 27 Telephone Expense 220 Apr 27 Cash 220 Apr 27 Dividend 940 Apr 27 Cash 940 Apr 28 Allowance for uncollectible Debt 200 Apr 28 Accounts Receivable 200 Closing Entries Apr 30 Cleaning Service 12150 Apr 30 Income Summary 12150 Apr 30 Income Summary 9085 Apr 30 Cash Discount 60 Apr 30 Wages Expense 5760 Apr 30 Insurance Expense 820 Apr 30 Loss on Sale of Window Equipment 250 Apr 30 Cleaning Supplies Expense 580 Apr 30 Depreciation Expense 90 Apr 30 Bad Debt Expense 279 Apr 30 Interest Expense 40 Apr 30 Income Tax Expense 766 Apr 30 Telephone Expense 440 Apr 30 Income Summary 3065 Apr 30 Retained Earning 3065 (Closed Income Summary) Feb 29 Retained Earning 940 Feb 29 Dividend 940 Adjusting Entries Date Account Debit Credit a. Accounts Receivable 3800 Cleaning Service 3800 b. Bad Debt Expense 279 9300*3% Allowance for uncollectible Debt 279 c. Depreciation Expense 90 (4820-500)/48 Accumulated Depreciation 90 d. Insurance Expense 820 9840/12 Prepaid Insurance 820 e. Cleaning Supplies expense 580 980-400 Cleaning Supplies 580 f. Unearned Cleaning Service 150 600/4 Cleaning Service 150 g. Wages Expense 1920 480*4*1week Waages Payable 1920 h. Interest Expense 40 8000*6%/12 Interest Payable 40 i. Income Tax Expense 766 Income Tax Payable 766 Cash Floor Equipment Cleaning Supplies Date Debit Credit Balance Date Debit Credit Balance Date Debit Credit Balance Beginning 0 0 Apr 3 4820 4820 Beginning 0 0 Apr 3 21000 10220 10780 Apr 3 980 980 Apr 5 3950 2460 12270 Apr 30 580 400 Apr 17 540 12810 Apr 18 300 12510 Apr 20 900 11610 Apr 24 3840 7770 Insurance Expense Prepaid Insurance Apr 25 2500 10270 Date Debit Credit Balance Date Debit Credit Balance Apr 27 1160 9110 Apr 30 820 820 Beg 0 0 Apr 5 9840         9,840 Apr 30 820         9,020 Wages Expense Payable Date Debit Credit Balance Long Term Note Payable Income Tax Expense Date Debit Credit Balance Date Debit Credit Balance Apr 3 8000 8000 Apr 30 766 766 Service Revenue Date Debit Credit Balance Apr 17 3900 3900 Apr 24 4300 8200 Depreciation Expense Interest Expense Payable Apr 30 3800 12000 Date Debit Credit Balance Date Debit Credit Balance Apr 30 150 12150 Apr 30 90 90 Apr 30 40 40 12150 Wages Expense Windiow Equipment Accumulated Depreciation Date Debit Credit Balance Date Debit Credit Balance Date Debit Credit Balance Apr 24 3840 3840 Apr 3 4200 4200 Beginning 0 0 Apr 30 1920 5760 Apr 5 4200 0 Apr 30 90 90 Accounts Receivable Interest Expense Date Debit Credit Balance Date Debit Credit Balance Beginning 0 0 Apr 30 40 40 Apr 17 3900 3900 Apr 24 4300 8200 Telephone Expense Apr 25 2500 5700 Date Debit Credit Balance Apr 28 200 5500 Apr 3 220 220 Apr 30 3800 9300 Apr 27 220 Income Tax Expense Payable Cleaning Supp Expense Date Debit Credit Balance Date Debit Credit Balance Apr 30 766 766 Apr 30 580 580 Accounts Payable Date Debit Credit Balance Beginning 0 0 Apr 5 7380 7380 Apr 18 300 7080 Allowance for Uncoll Debt Date Debit Credit Balance Apr 30 279 279 Unearned Cleaning Service Date Debit Credit Balance Bad Debt Expense Apr 17 600 600 Date Debit Credit Balance Apr 30 150 450 Apr 30 279 279 Unadjusted Trial Balance Adjustment Adjusted Trial Balance Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash 9110 9110 9110 Accounts Receivable 5500 3800 9300 9300 Allowance for uncollectible Debt 200 279 0 79 0 79 Cleaning Supplies 980 580 400 400 Prepaid Insurance 9840 820 9020 9020 Floor Equipment 4820 4820 4820 Accumulated Depreciation 0 0 90 90 90 Interest Expense Payable 40 40 40 Wages Payable 1920 1920 1920 Accounts Payable 7080 7080 7080 Long Term Note Payable 8000 8000 8000 Unearned Clearning Service 600 150 450 450 Common Stock 7500 7500 7500 Treasury Stock 900 900 900 Additional Paid Up Capital 5500 5500 5500 Dividend 940 940 940 Cleaning Service 8200 3950 12150 12150 Cash Discount 60 0 60 60 Wages Expense 3840 1920 5760 5760 Insurance Expense 0 820 820 820 Loss on Sale of Window Equipment 250 250 250 Cleaning Supplies Expense 0 580 580 580 Depreciation Expense 0 90 90 90 Bad Debt Expense 0 279 279 279 Interest Expense 40 40 40 Telephone Expense 440 440 440 Total 36880 36880 7679 7679 42809 42809 8319 12150 34490 30659 Net Income 3831 3831 Grand Total 34490 34490

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