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April 1, 2016 The stockholders purchase 7,500 shares of $10 par value stock. Total cash received...

April 1, 2016 The stockholders purchase 7,500 shares of $10 par value stock. Total cash received is $75,000.

April 1, 2016 The company took a $30,000 business loan from a local bank. The loan is "interest only" loan for three years at a fixed rate of 10%. A ballon payment of the principal will be due in 3 years. The montly interest payment is due by the 10th of the following month.

April 1, 2016 Management rents a combination office and garage facility for $1,000 per month and pays 4 months ($4,000) in advance by cash in addition to a $1,500 security deposit.

April 1, 2016 Purchased a truck valued at $45,000 with a $15,000 down payment and a 4-year $30,000 note payable with an annual interest rate of 5%. The truck has a 5-year useful life and no salvage value. The monthly payment including principal and interest is $690.88.

April 1, 2016 Purchased used equipment and trailers for $25,000 cash. The equipment and trailers have a 5-year useful life and no salvage value.

April 2, 2016 Purchased on account Lawn & Garden Supplies in the amount of $6,000 from Wintergreen Garden Center.

April 4, 2016 Dorsey contracted with two local businesses, Preston Hill B & B and Grace's Diner to provide monthly llandscaping service at a rate of $650 per month. Dorsey Landscape will bill the businesses at the end of each month.

April 6, 2016 Purchased $500 of office supplies on account from ABC Office Supply.

April 8, 2016 Paid invoice from Insurance company for 4 months of coverage beginning April 1, 2015 for a total of $1,600.

April 10, 2016 Receipts of cash from landscaping services in the amount of $5,200 were deposited to bank.

April 14, 2016 Paid 1/2 of amount owed to Wintergreen Garden Center.

April 16, 2016 Paid $1,200 in wage expense for the period April 1 - April 15, 2015.

Aprl 19, 2016 Paid ABC Office Supply invoice for purchases on April 6, 2016.

April 20, 2016 Received $7,500 in cash and checks for landscaping services rendered.

April 24, 2016 Returned $500 worth of lawn and garden supplies to Wintergreen Garden Center and received credit on account.

April 25, 2016 Received $1,000 advance deposit from customer for landscaping work to be stared in May 2016.

April 28, 2016 Paid remaining balance owed to Wintergreen Garden Center.

April 30, 2016 Truck Payment # 1 - Total $690.88 (Principal = $565.88; Interest = $125.00)

April 30, 2016 Paid $1,400 in wages expense for the period April 16 - April 30, 2016.

April 30, 2016 Pay credit card in full with the following charges incurred in April 2016: Gasoline - $625; Equipment Maintenance - $375; Dues - $150; Uniforms - $425; Advertising $375; Postage $100

April 30, 2016 Sent invoices to Grace's Diner and Preston Hill B & B for monthly lawn service.

April 30, 2016 Paid dividends to shareholders in the amount of $500.

Prepare and post the closing entries for the month ended

April 30, 2016. Note the following additional information:

1. The business began on April 1, 2016

2. The period under consideration is April 1, 2016 - April 30, 2016.

3. ignore the effects of income tax, property tax, sales tax, and payroll tax.

4. Straight-line depreciation method is used.

5. On April 30, 2016, the company had $150 of Office Supplies and $850 of Lawn & Garden Supplies on hand

. 6. The telephone bill for April 2016 for $260 was received May 2016

. 7. The utility bill for April 2016 for $185 was received May 2016

. 8., consider the note payable for the truck purchase to be a current liability.

prepare general ledgers

Solutions

Expert Solution

In the books of ......:

Date Account Titles Debit Credit
April, 2016 $ $
1 Cash 75,000
Common Stock 75,000
1 Cash 30,000
Bank Loan Payable 30,000
1 Prepaid Rent 4,000
Security Deposit 1,500
Cash 5,500
1 Truck 45,000
Cash 15,000
Note Payable 30,000
1 Equipment 25,000
Cash 25,000
2 Lawn and Garden Supplies 6,000
Accounts Payable 6,000
4 No entry required 0 0
6 Office Supplies 500
Accounts Payable 500
8 Prepaid Insurance 1,600
Cash 1,600
10 Cash 5,200
Service Revenue 5,200
14 Accounts Payable 3,000
Cash 3,000
16 Wages Expense 1,200
Cash 1,200
19 Accounts Payable 500
Cash 500
20 Cash 7,500
Service Revenue 7,500
24 Accounts Payable 500
Lawn and Garden Supplies 500
25 Cash 1,000
Unearned Service Revenue 1,000
28 Accounts Payable 2,500
Cash 2,500
30 Interest Expense 125
Note Payable 565.88
Cash 690.88
30 Wages Expense 1,400
Cash 1,400
30 Credit Card Expense 2,050
Cash 2,050
30 Accounts Receivable 1,300
Service Revenue 1,300
30 Dividends 500
Cash 500

Adjusting entries:

Date Account Titles Debit Credit
April 30, 2016 $ $
a. Office Supplies Expense 350
Office Supplies 350
b. Lawn and Garden Supplies Expense 4,650
Lawn and Garden Supplies 4,650
c. Insurance Expense 400
Prepaid Insurance 400
d. Rent Expense 1,000
Prepaid Rent 1,000
e. Depreciation Expense 1,167
Accumulated Depreciation : Truck 750
Accumulated Depreciation : Equipment 417
f. Telephone Expense 260
Accounts Payable 260
g. Utilities Expense 185
Accounts Payable 185
h. Interest Expense ( $ 30,000 x 10 % x 1 / 12 ) 250
Interest Payable 250

Ledger Accounts:

Cash

April 1 75,000 April 1 5,500
April 1 30,000 April 1 15,000
April 10 5,200 April 1 25,000
April 20 7,500 April 8 1,600
April 25 1,000 April 14 3,000
April 16 1,200
April 19 500
April 28 2,500
April 30 690.88
April 30 1,400
April 30 2,050
April 30 500
Balance, April 30 $ 59,759.12

Accounts Receivable:

April 30 1,300
Balance, April 30 1,300

Lawn and Garden Supplies:

April 2 6,000 April 24 500
Lawn and Garden Supplies Expense 4,650
Balance, April 30 850

Office Supplies:

April 6 500 Office Supplies Expense 350
Balance, April 30 150

Prepaid Rent:

April 1 4,000 Rent Expense 1,000
Balance, April 30 3,000

Prepaid Insurance:

April 8 1,600 Insurance Expense 400
Balance, April 30 1,200

Security Deposit: Rent

April 1 1,500
Balance, April 30 1,500

Truck:

April 1 45,000
Balance, April 30 45,000

Equipment:

April 1 25,000
Balance, April 30 25,000

Accumulated Depreciation: Truck

Depreciation Expense 750
Balance, April 30 750

Accumulated Depreciation : Equipment

Depreciation Expense 417
Balance, April 30 417

Accounts Payable:

April 14 3,000 April 2 6,000
April 19 500 April 6 500
April 24 500
April 28 2,500
April 30 445
Balance, April 30 445

Interest Payable:

April 30 250

Unearned Service Revenue:

April 25 1,000
Balance, April 30 1,000

Note Payable:

April 30 565.88 April 1 30,000
Balance, April 30 29,434.12

Bank Loan Payable :

April 1 30,000
Balance, April 30 30,000

Common Stock:

April 1 75,000
Balance, April 30 75,000

Dividends:

April 30 500

Service Revenue:

April 10 5,200
April 20 7,500
April 30 1,300
Income Summary 14,000

Wages Expense:

April 16 1,200
April 30 1,400
Income Summary 2,600

Rent Expense:

April 30 1,000
Income Summary 1,000

Insurance Expense:

April 30 400
Income Summary 400

Lawn and Depreciation Expense:

April 30 4,650
Income Summary 4,650

Office Supplies Expense:

April 30 350
April 30 350

Gasoline Expense:

April 30 625
Income Summary 625

Equipment Maintenance Expense:

April 30 375
Income Summary 375

Uniforms Expense:

April 30 425
Income Summary 425

Advertising Expense:

April 30 375
Income Summary 375

Postage Expense:

April 30 100
Income Summary 100

Credit Card Expense:

April 30 150
Income Summary 150

Depreciation Expense:

April 30 1,167
Income Summary 1,167

Telephone Expense:

April 30 260
Income Summary 260

Utilities Expense:

April 30 185
Income Summary 185

Interest Expense:

April 30 125
April 30 250
Income Summary 375

ekkarill92 answered 1 year ago
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