Harry Craig opened Craig Cleaners on March 1, 2015. During March, the following

Question

Harry Craig opened Craig Cleaners on March 1, 2015. During March, the following transactions were completed.

Mar 1 Issued 10,000 shares of common stock for $20,000 cash.

        1 Purchased used equipment for $9,000, paying $3,000 cash and the balance on account.

        3 Purchased cleaning supplies on account for $3,000.

        4 Paid $2,400 cash on a 6-month insurance policy effective March 1, 2015.

        7 Paid $ 1,600 for monthly rent.

      14 Billed customers $ 5,400 for cleaning services.

      18 Paid $ 1,400 cash on account owed on equipment and $ 500 on account owed on cleaning supplies.

      20 Paid $1,900 cash for employee salaries.

      21 Collected $3,100 cash from customers billed on March 14.

      22 Billed customers $ 5,800 for cleaning services.

      23 Paid $400 for gas and oil used in truck during month (use Maintenance and Repairs Expense).

      31 Declared and paid a $ 500 cash dividend.

The chart of accounts for Craig Cleaners contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation-Equipment, Accounts Payable, Salaries and Wages Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Maintenance and Repairs Expense, Depreciation Expense, Rent Expense, Supplies Expense, Insurance Expense, Salaries and Wages Expense.

Instructions:

Post adjusting entries to the T-accounts.

Explanation / Answer

400

Cash A/c Particular amount particular amount to Account receivable 3100 By equipment $3,000 to common stock 20000 By Prepaid insurance 2400 By rent 1600 by a/c payable 1400 by wages and salary $1,900 By repair and maintenance $400 by dividend $500 By bal c/d $11,900 23100 23100 Account receivaable A/c Particular amount particular amount to cleaning services 5400 by cash 3100 to cleaning services 5800 by bal c/d 8100 11200 11200 A/c Payable Particular amount particular amount to cash 1400 By equipment 6000 to bal c./d 7600 by supply a/c 3000 9000 9000 Common Stock A/c Particular amount particular amount to bal c/d 20000 By bank 20000 20000 20000 Maintenance A/c Particular amount particular amount to cash 400 by bal c/d 400 400

400

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