Question

.

July

1 Invested personal money of $14,000 into the new company bank account

1 Purchased a used van 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 one-year insurance policy, effective July 1.

12 Billed customer $3,800 for cleaning services.

18 Paid $1,000 of the amount owed on the van, and $400 of the 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 gas and oil for the month on the van, $400

31 Paid herself $600 for personal use.

Answer:

(g) Journalize and post the adjusting entries. Use page J2 for the journal.

(h) Journalize and post the closing entries, and complete the closing process. Use page J3 for the journal.

(i) Prepare a post-closing trial balance at July 31.

The chart of accounts for the company contain the following accounts:

101 Cash

112 Accounts Receivable

128 Cleaning Supplies

130 Prepaid Insurance

157 Equipment

158 Accumulated Depreciation-Equipment

201 Accounts Payable

212 Salaries Payable

311 Owner's Equity

320 Owner Withdrawal

350 Income Summary

400 Service Revenu

633 Gas and Oil Expense

634 Cleaning Supplies Expense

711 Depreciation Expense

722 Insurance Expense

726 Salaries Expense

Check Points:

Worksheet Adjustments debit column: 2,850

Adjusted Trial Balance worksheet Credit balance: 27,700  

Income Statement Net Income: 3,050

Balance Sheet Credit column total: 24,150

Cash Ledger Account, July 20 balance: 6,200

Accounts Payable July 18 ending balance: 6,400

Balance Sheet Total Assets total: 23,350

Answer 1

(g and h) Journalize and post the adjusting entries and closing entries.

Date	Particulars	L.F	Amount ($)	Amount ($)
Jul-01	Cash		14,000
	Owners equity			14,000
	(For cash invested)
Jul-01	Equipment		10,000
	Cash			3,000
	Accounts payable			7,000
	(for Van purchased)
Jul-03	Cleaning supplies		800
	Accounts payable			800
	(for claening supplies purchased)
Jul-05	Prepaid Insurance		1,800
	Cash			1800
	(For paid for insurance)
Jul-12	Account Receivable		3,800
	Service Revenue			3,800
	(for billed for cleaning services)
Jul-18	Account payable		1,400
	cash			1400
	(for paid to AP)
Jul-20	Salaries expense		1,600
	Cash			1,600
	(for paid for salaries)
Jul-21	cash		1,400
	Account Receivable			1400
	(for cash collected from customers)
Jul-25	Account Receivable		1,500
	Service Revenue			1,500
	(for billed for cleaning services)
Jul-31	Gas and Oil Expense		400
	Cash			400
	(For paid for gas and oil expense)
Jul-31	Owners Withdrawal		600
	Cash			600
	(for cash withdrawn for personal use)
Jul-31	Insurance Expense		150
	Prepaid insurance (1,800*1/12)			150
	(For 1 month insurance expired)
Date	Particulars	L.F	Debit	Credit
20XX			$	$
Jul-31	Service Revenue		5,300
	Income summary			5,300
	(For income closing balances recorded)
Jul-31	Income summary		2,150
	Salaries Expense			1,600
	Gas and Oil Expense			400
	Insurance Expense			150
	(For expenses closing balances recorded)
Jul-31	Income summary		3,150
	Owners Equity			3,150
	(For income summary close to owners equity)

(i )

Post Closing Trial Balance
	Debit	Credit
Cash	6,600
Equipment	10,000
Cleaning supplies	800
Prepaid Insurance	1,650
Account Receivable	3,900
Accounts payable		6,400
Owners equity		17,150
Owners Withdrawal	600
	23,550	23,550