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Kristin Malone opened Kristin\'s Maids Cleaning Service on July 1, 2015. During

ID: 2483793 • Letter: K

Question

Kristin Malone opened Kristin's Maids Cleaning Service on July 1, 2015. During July, the company completed the following transactions.

The chart of accounts for Kristin's Maids Cleaning Service contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 631 Supplies Expense, No. 633 Gasoline Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense.

Instructions

Prepare a trial balance at July 31 on a worksheet.

Trial balance $25,700

1.  

2.  

3.  

4.  

5.  

Prepare an income statement and a retained earnings statement for July, and a classified balance sheet at July 31, 2015.

Net income $3,050

Total assets $23,350

Prepare a post-closing trial balance at July 31.

Post-closing trial balance $23,550

July?1 Stockholders invested $14,000 cash in the business in exchange for common stock. 1 Purchased a used truck for $10,000, paying $3,000 cash and the balance on account. 3 Purchased cleaning supplies for $800 on account. 5 Paid $1,800 on a 1-year insurance policy, effective July 1. 12 Billed customers $3,800 for cleaning services. 18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies. 20 Paid $1,600 for employee salaries. 21 Collected $1,400 from customers billed on July 12. 25 Billed customers $1,500 for cleaning services. 31 Paid gasoline for the month on the truck, $400. 31 Declared and paid a $600 cash dividend.

Explanation / Answer

Journal Entries

JULY1. CASH DEBIT $14000

TO COMMON STOCK $14000

1. TRUCK DEBIT $10000

TO CASH CR. $3000

TO ACOUNTS PAYABLE CR.$7000

3. SUPPLIES DR/ $800

TO ACOUNTS PAYABLE CR.$800

5. PREPAID INSURANCE DR. $1800

TO CASH CR. $1800

12. ACCOUNTS RECIEVABLE DR. $3800

TO SERVICE REVENUE CR. $3800

18. ACOUNTS PAYABLE DR.$1400

TO CASH CR. $1400

20. SALARIES AND WAGES DR. $1600

TO CASH $1600

21. CASH DR. $1400

TO ACCOUNTS RECEIVABLE CR. $1400

25. ACCOUNTS RECEIVABLE DR. $1500

TO SERVICE REVENUE CR. $1500

31. GASOLINE DR. $400

TO CASH CR. $400

31. DIVIDENDS DR. $600

TO CASH CR. $600

TRIAL BALANCE

INCOME STATEMENT

RETAINED EARNING STATEMENT

BALANCE SHEET

ANSWER E

1.UNEARNED REVENUE DR. $1300

TO SERVICE REVENUE CR. $1300

2.DEPRECIATION DR. $200

TO TRUCK CR. $200

3. INSURANCE DR. $150

TO PREPAID INSURANCE $150

4.POFIT AND LOSS DR. $700

TO SUPPLIES CR. $700

5. SALARY AND WAGES DR. $500

TO ACCRUED SALARY CR. $500

PARTICULARS DEBIT $ CREDIT $ COMMON STOCK 14000 CASH 6600 ACCOUNTS RECEIVABLE 3900 ACCOUNTS PAYABLE 6400 TRUCK 10000 SUPPLIES 800 PREPAID INSURANCE 1800 SERVICE REVENUE 5300 SALRIES AND WAGES 1600 GASOLINE 400 DIVIDENDS 600 TOTAL 25700 25700