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Kristin Malone opened Kristin\'s Maids Cleaning Service on July 1, 2017. During

ID: 2767042 • Letter: K

Question

Kristin Malone opened Kristin's Maids Cleaning Service on July 1, 2017. During July, the company completed the following transactions. July1 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. Post the July transactions (Post entries in the order of journal entries presented above.)

Explanation / Answer

Journal entry belongs to Accounting, not Finance. Classify questions properly.

(1) Jul 1

DR Cash $14,000

       Common stock $14,000

(To record common stock invested for cash)

(2) Jul 1

DR Truck $10,000

        Cash $3,000

        Accounts payable $7,000

(To record purchase of truck by cash and on account)

(3) Jul 3

DR Cleaning supplies $800

       Accounts payable   $800

(To record purchase of cleaning supplies on account)

(4) Jul 5

DR Prepaid insurance $1,650

DR Insurance expense $150

         Cash                     $1,800

(To record purchase of 1-year insurance policy)

(5) Jul 12

DR Accounts receivables $3,800

         Revenue                    $3,800

(To record revenue recognized)

(6) Jul 18

DR Accounts payable $1,400

        Cash                     $1,400

(To record payment of accounts receivable)

(7) Jul 20

DR Salaries expense $1,600

         Cash                   $1,600

(To record salaries paid)

(8) Jul 21

DR Cash   $1,400

        Accounts receivable $1,400

(To record cash received from customers)

(9) Jul 25

DR Accounts receivables $1,500

         Revenue                    $1,500

(To record revenue recognized)

(10) Jul 31

DR Gasoline expense $400

         Cash                    $400

(To record gasoline purchased)

(11) Jul 31

(a)

DR Dividend $600

         Dividend payable $600

(To record dividend declared)

(b)

DR Dividend payable $600

         Cash                  $600

(To record dividend payment)