Question

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

Answer 1

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