Question

Instructions

• Journalize the transactions for the month of January 2018, beginning on page GJ1. Be sure and list the Debit Account(s) first; Credit Account(s) next. Write a brief explanation for each transaction, and skip a line in-between transactions.
• Post the journal entries to the general ledger accounts. Be sure and use the Post Reference #s for each posting. (Hint: the balance of the cash account after all journal entries have been posted should be $9,915).
• Prepare the Trial Balance section of the worksheet.
• Prepare the Adjustments section of the worksheet.
  • Compute and record the adjustment for supplies used during the month. An inventory showed supplies on hand of $250.
  • One month insurance has been used up.
  • Record the adjustment for depreciation of Office Equipment of $85 for the month.
  • Record the adjustment for depreciation of Tools of $125 for the month.
• Complete the worksheet.
• Prepare an Income Statement, Statement of Owner’s Equity, and Balance Sheet for the month. Be sure to add the date to each financial statement.
• Journalize and post the Adjusting entries.
• Journalize and post the Closing entries.
• Prepare a Post-closing Trial Balance.

CHART OF ACCOUNTS

Assets                                                                      Revenue

111     Cash                                                             411     Income from Services

112     Accounts Receivable                               

114     Supplies                                                       Expenses

116     Prepaid Insurance                                     511     Advertising Expense

121     Office Equipment                                       512     Supplies Expense

122     Accum. Depr., Office Equipment           513     Insurance Expense

123     Tools                                                             514     Utilities Expense

124     Accum. Depr., Tools                                 515     Salaries Expense

125     Truck                                                             516     Truck Expense

521     Depreciation Expense - Office Equipment

Liabilities                                                                  522     Depreciation Expense - Tools

211     Accounts Payable   

Owner’s Equity                                                                  

311     Mike Hammer, Capital                              

312     Mike Hammer, Drawing

330     Income Summary

Transactions for the month:

You made the following transactions for Mike’s Quality Repair Services during the month of January:

Jan.    1          Invested $15,000 cash, and a truck with a fair market value of $8,500 into the business.      

3          Paid $1800 to Liberty Mutual for a 1-year insurance policy. The policy is effective immediately. Ck# 1001

4          Bought tools from Sears on account, $7500, Inv. #X-1357

5          Bought computer system from Ben’s Computer Center, $5000, putting $2500 down and putting the balance on account, Ck. #1002, Inv. #Y-4152.

6          Bought supplies-Office Mart, $850, Ck. #1003.

7          Performed services for cash, $1,650.

10        Performed services on account, $1275.

12        Received and paid telephone bill, $420, ck#1004.

13        Bought supplies on account from Office Mart, $900, Inv. AB1477.

15        Received and paid the utility bill, $600, Ck. #1005.

15        Paid salary for office clerk, 1/1-1/15-$1000, Ck# 1006.

20        Received The Times Review bill for advertising for the month, $410, Inv. #TR198.

            (Note that you did not PAY the bill – you only received it).

21        Performed services $7,250, received $2,250 cash, with the balance due in 30 days.

27        Received from clients $1,275, for work completed on January 10.

28        Paid for oil change on truck, $90, ck#1007.

29        Withdrew cash for personal use, $1500, Ck. #1008.

30        Paid salary for office clerk, 1/16-1/30, $1000, ck#1009.

30        Made partial payment of $500 to Office Mart for supplies purchased on January 13th, Ck#1010.

Answer 1