Klean Kars, which began operations in October, is enjoying continuing success. T
ID: 2422925 • Letter: K
Question
Klean Kars, which began operations in October, is enjoying continuing success. The November 30, 2011 unadjusted trial balance is as follows:
Klean Kars had the following transactions and events in December 2011
2-Dec Paid $1,025 cash to Hillside Mall for Klean Kars share of mall advertising costs
3-DecPaid $500 cash for minor repairs to company's computer
4-Dec Received $3,950 cash from Jane Smith for a receivable recorded in November
10-Dec Paid cash to Lyn Addie for 6 days of work at the rate of $125 per day. Ignore associated payroll taxes
14-Dec Contacted by James Johnson, who indicated Klean Kars would be hired to perform $7,000 worth of cleaning services over the next 6 months.
14-Dec J. Johnson paid a $1,500 cash advance to Klean Kars and the project is expected to begin on January 15, 2012
15-Dec Purchased $1,100 of cleaning supplies on credit from Harris Office Products
16-Dec Sent a reminder to Suzy Solomon to pay the fee for services recorded on November 8
20-Dec Started and completed a cleaning project for Liu Corporation and received $5,625 cash
28-Dec Received $3,000 cash from Suzy Solomon on her accounts receivable
31-Dec Reimbursed an employee for business automobile mileage - 600 total miles at a rate of $.50 per mile
The following additional facts are collected for use in making adjusting entries prior to preparing financial
The December 31 inventory count of cleaning supplies shows $580 still available
On October 1, 2011, Klean Kars paid their annual insurance premium in the amount of $2,220, which
As of December 31, Lyn Addie has not been paid for 4 days of work at $125 per day
Record depreciation expense for the company's computer in the amount of $1200
Record depreciation expense for the company's office equipment in the amount of $800
On October 1, 2011, Klean Kars signed a 2 year lease agreement, which had the following terms:
** $825 per month ** First 4 months rent due at time of signing (October 1, 2011). ** Payments will be made monthly starting February 1, 2012.
Required: Prepare journal entries to record each of the December transactions and events for Klean Kars
Prepare adjusting entries to reflect a - f noted above. Post those entries to the accounts in the ledger
Prepare an adjusted trial balance as of December 31, 2011
Prepare an income statement for the three months ended December 31, 2011
Prepare a statement of owner's equity for the three months ended December 31, 2011
Prepare a balance sheet as of December 31, 2011
Record and post the necessary closing entries for Klean Kars
Prepare a Post-closing trial balance as of December 31, 2011
I did my journal entries I was wondering if someone could look over mine and help me with the other steps.
Acct No Acct Title Debit Credit 25 Cash 38264 106 Accounte receivable 12618 126 Cleaning supplies 2545 128 Prepaid insurance 2220 131 Prepaid rent 3300 163 Office equipment 8000 164 Accum. Dep - Office equip 0 167 Computer equip 20000 168 Accum. Dep - Computer equip. 0 201 Accounts Payable 0 210 Wages payable 0 236 Unearned Services Revenue 0 301 Common stock 44850 302 Retained earnings 22300 403 Services revenue 25659 612 Depreciation expense - Office Equip 0 613 Depreciation expense - Computer Equip 0 623 Wages expense 2625 637 Insurance expense 0 640 Rent expense 0 655 Advertising expense 1728 676 Mileage expense 704 684 Repairs Expense - Computer 805 3 Journal Entries 4. GENERAL JOURNAL 6 Date Account Titles and Explanation Debit Credit 2-Dec 102 Advertising expense Cash Paid a share of advertising costs 102 10 3-Dec Repairs expense (Computer Cash Computer repair 50 12 13 14 50 16 4-Dec 395 Cash Accounts receivable Collected for accounts receivable 395 18 19 20 10-Dec Wages expense Cash Paid emplovee 75 75 23 24 14-Dec 25 26 27 28 15-Dec Cleaning upplies 29 30 Cash Unearned service revenue Paid in advance 150 150 110 110 Accounts avable Purchased supplies on credit 32 16-Dec None 562 34 20-Dec 35 36 37 38 28-Dec 39 40 Cash Service revenue Collected cash from customer 562 300 Cash Accounts receivable Collected accounts receivable 300 42 31-Dec 43 Mileage expense Cash Reimbursed for mileage 30 30 45 46 47 48Explanation / Answer
1. You are correct with the Journal entries
2. For the adjusting entries
cleaning supplies expense = $2545 + $1100 - $580 = $3065
Cleaning supplies expense $3065
Cleaning supplies $3065
Insurance expense for 3 months (1october - 31december) 2220 /12 = 185 *3 = $555
Insurance expense $555
Prepaid insurance $555
Salary payable = $125* 4days = $500
Salary expense $500
Salary expense payable $500
Depreciation expense computer equipment $1,200
Accumulated depreciation computer equipment $1,200
Depreciation expense office equipment $800
Accumulated depreciation office equipment $800
Rent expense = 825 *3 = $2475
Rent expense $2,475
Prepaid rent $2,475
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