The following information applies to the questions displayed below. The general
ID: 2543581 • Letter: T
Question
The following information applies to the questions displayed below. The general ledger of Red Storm Cleaners at January 1, 2018, includes the following account balances: Accounts Cash Accounts Recevable Supplies Equipment Accumulated Depreciation Salaries Payable Common Stock Retained Earnings Debits $15,500 7,100 3,100 0,500 Credits $ 3,200 5,200 20,500 7,300 Totals $36,200 $36,200 The following is a summary of the transactions for the year: a. March 12 Provide services to customers, $51,000, of which $20,100 is on account b. May 2 Collect on accounts receivable, $17100. c. June 30 Issue shares of common stock in exchange for $6,000 cash. d. August 1 Pay salaries, $25,100 (of which $5,200 is for salaries payable in 2017). e. September 25 Pay repairs and maintenance expenses, $12,100. f. October 19 Purchase equipment for $7100 cash. g. December 30 Pay $1,100 cash dividends to stockholders. h. Accrued salaries at year-end amounted to $1,100. Depreciation for the year on the equipment is $4,100. Office supplies remaining on hand at the end of the year equal $1,200.Explanation / Answer
RED STORM CLEANERS General journal for the year ended December31, 2018 Date Ref Account Title Debit Credit March.12 a Cash 30900 Accounts Receivable 20100 Service Revenue 51000 (Service provided for cash and on account) May.2 b Cash 17100 Accounts Receivable 17100 (Collection from customers on account) June.30 c Cash 6000 Common stock 6000 (Issue of common stock for cash) August.1 d Salaries Payable 5200 Salaries Expense 19900 Cash 25100 (Salaries paid ) Sept.25 e Repairs and maintenance expense 12100 Cash 12100 (Repairs nad maintenace exp. Paid by cash) Oct.19 f Equipment 7100 Cash 7100 (Purchase of equipment for cash) Dec.30 g Dividends 1100 Cash 1100 (Cash dividend paid) Cash Accounts Receivable Ref Debit Credit Ref Ref Debit Credit Ref Beg.Bal. 15500 25100 d Beg.Bal. 7100 17100 b a 30900 12100 e a 20100 b 17100 7100 f c 6000 1100 g 69500 45400 27200 17100 End.Bal. 24100 End.Bal. 10100 Supplies Equipment Ref Debit Credit Ref Ref Debit Credit Ref Beg.Bal. 3100 Beg.Bal. 10500 f 7100 3100 0 17600 0 End.Bal. 3100 End.Bal. 17600 Accumulated Depreciation - Equipment Salaries Payable Ref Debit Credit Ref Ref Debit Credit Ref 3200 Beg.Bal. d 5200 5200 Beg.Bal. 3200 5200 5200 3200 End.Bal. Common Stock Retained Earnings Ref Debit Credit Ref Ref Debit Credit Ref 20500 Beg.Bal. 7300 Beg.Bal. 6000 c 26500 7300 26500 End.Bal. 7300 End.Bal. Service Revenue Salaries Expense Ref Debit Credit Ref Ref Debit Credit Ref 51000 a d 19900 0 51000 19900 0 51000 End.Bal. End.Bal. 19900 Repairs and maintenance expense Dividends Ref Debit Credit Ref Ref Debit Credit Ref e 12100 g 1100 12100 0 1100 0 End.Bal. 12100 End.Bal. 1100 RED STORM CLEANERS Unadjusted Trial Balance as at December 31, 2018 Account Debit Credit Cash 24100 Accounts Receivable 10100 Supplies 3100 Equipment 17600 Accumulated Depreciation - Equipment 3200 Salaries Payable Common Stock 26500 Retaied Earnings 7300 Dividends 1100 Service Revenue 51000 Salaries Expense 19900 Repairs andmaintenance expense 12100 Total 88000 88000 RED STORM CLEANERS Adjusting entries for the year ended December31, 2018 Date Ref Account Title Debit Credit Dec.31 h Salaries Expense 1100 Salaries Payable 1100 (Salaries asscrued and not paid) Depreciation expense 4100 Accumulated Depreciation - Equipment 4100 (Depreciation for the year) Office Supplies Expense 1900 Office Supplies 1900 (Supplies cosnumed during the year) RED STORM CLEANERS Adjusted Trial Balance as at December 31, 2018 Account Debit Credit Cash 24100 Accounts Receivable 10100 Supplies 1200 Equipment 17600 Accumulated Depreciation - Equipment 7300 Salaries Payable 1100 Common Stock 26500 Retaied Earnings 7300 Dividends 1100 Service Revenue 51000 Salaries Expense 21000 Repairs andmaintenance expense 12100 Depreciation expense 4100 Office Supplies expense 1900 Total 93200 93200 RED STORM CLEANERS Adjusted Trial Balance as at December 31, 2018 Assets Liabilities Current Assets Cash 24100 Salaries payable 1100 Accounts Receivable 10100 Supplies 1200 Total Current Assets 35400 Total liabilities 1100 Long-term assets Stockholders; equity Equipment 17600 Common stock 26500 Accumulated Depreciation - Equipment -7300 Retained earnings 18100 Total Long term assets 10300 Tota stockholders' equity 44600 Total Assets 45700 Total liabilities and stockholders' equity 45700
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