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Preparing Adjusting Entries, Financial Statements, and Closing Entries Murdock Carpet Cleaners ended its first month of...

Preparing Adjusting Entries, Financial Statements, and Closing Entries

Murdock Carpet Cleaners ended its first month of operations on June 30, 2015. Monthly Financial

statements will be prepared. The unadjusted account balances are as follows.

MURDOCK CARPET CLEANERS

Unadjusted Trial Balance

June 30, 2015

Debit Credit

Cash ........................................................ $ 1,180

Accounts receivable............................................ 450

Prepaid rent .................................................. 3,100

Supplies ..................................................... 2,520

Equipment ................................................... 4,440

Accounts payable.............................................. $ 760

Common stock................................................ 2,000

Retained earnings ............................................. 5,300

Service fees earned ............................................ 4,650

Wages expense ............................................... 1,020

$12,710 $12,710

The following information is available.

1. The balance in Prepaid Rent was the amount paid on June 1 for the rst four months’ rent.

2. Supplies available at June 30 were $820.

3. Equipment, purchased June 1, has an estimated life of ve years.

4. Unpaid and unrecorded employee wages at June 30 were $210.

5. Utility services used during June were estimated at $300. A bill is expected early in July.

6. Fees earned for services performed but not yet billed on June 30 were $380. The company uses

the account Accounts Receivable to reect amounts due but not yet billed.

REQUIRED

a. Prepare its adjusting entries at June 30, 2015 using the nancial statement effects template.

b. Prepare its adjusting entries at June 30, 2015 in journal entry form.

c. Set up T-accounts, enter the balances above, and post the adjusting entries to them.

d. Prepare its income statement for June and its balance sheet at June 30, 2015.

e. Prepare entries to close its temporary accounts in journal entry form and post the closing en-

tries to the T-accounts.

Solutions

Expert Solution


ekkarill92 answered 1 week ago
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