Question

Gillian Shaw opened Shaw's Carpet Cleaners on March 1. During March, the following transactions were completed.

Mar. 1 Stockholders invested $10,000 cash in the business in exchange for common stock. 1 Purchased used truck for $6,000, paying $3,000 cash and the balance on account. 3 Purchased cleaning supplies for $1,200 on account. 5 Paid $1,200 cash on a 1-year insurance policy effective March 1. 14 Billed customers $4,800 for cleaning services. 18 Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies. 20 Paid $1,800 cash for employee salaries. 21 Collected $1,400 cash from customers billed on March 14. 28 Billed customers $4,500 for cleaning services. 31 Paid $500 for the monthly gasoline bill for the truck. Paid a $700 cash dividend. Adjusting Entries:

1.	Unbilled revenue for services performed at March 31 was $500.
2.	Depreciation on equipment for the month was $300.
3.	One-twelfth of the insurance expired.
4.	An inventory count shows $250 of cleaning supplies on hand at March 31.
	5. Accrued but unpaid employee salaries were $550. Prepare an adjusted trial balance with the information provided. Prepare an income statement and retained earnings statment for March and a calssified balanced sheet at March 31. Journalize and post adjusting entries. Journalize and post closing entries and complete the closing process. Prepare a post-closing tribal balance at March 31.

Answer 1

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Date	Account	Debit	Credit
Mar 1	Cash	$ 10,000
Mar 1	Common Stock		$ 10,000
Mar 1	Truck	$    6,000
Mar 1	Cash		$    3,000
Mar 1	Accounts Payable		$    3,000
Mar 3	Cleaning Supplies	$    1,200
Mar 3	Accounts Payable		$    1,200
Mar 5	Prepaid Insurance	$    1,200
Mar 5	Cash		$    1,200
Mar 14	Accounts Receivable	$    4,800
Mar 14	Service Revenue		$    4,800
Mar 18	Accounts Payable	$    2,000
Mar 18	Cash		$    2,000
Mar 20	Salaries Expense	$    1,800
Mar 20	Cash		$    1,800
Mar 21	Cash	$    1,400
Mar 21	Accounts Receivable		$    1,400
Mar 28	Accounts Receivable	$    4,500
Mar 28	Service Revenue		$    4,500
Mar 31	Gasoline Expense	$        500
Mar 31	Cash		$        500
Mar 31	Dividend	$        700
Mar 31	Cash		$        700
Adjusting Entries:
1	Accounts Receivable	$        500
1	Service Revenue		$        500
2	Depreciation Expense	$        300
2	Accumulated Depreciation		$        300
3	Insurance Expenase	$        100		1200/12
3	Prepaid Insurance		$        100
4	Cleaning Supplies Expense	$        950		1200-250
4	Cleaning Supplies		$        950
4	Salaries Expense	$        550
4	Salaries Payable		$        550
Closing Entries:
1	Service Revenue	$    9,800
	Income Summary		$    9,800
	(Closing Revenue Account)
2	Income Summary	$    4,200
	Cleaning Supplies Expense		$        950
	Salaries Expense		$    2,350
	Depreciation Expense		$        300
	Gasoline Expense		$        500
	Insurance Expense		$        100
	(Closing Expense Account)
3	Income Summary	$    5,600
	Retained Earning		$    5,600
	(Closing Income Summary)
4	Retained Earning	$        700
	Dividend		$        700
	(closing Dividend Account)

Trial Balance:
	Adjusted		Closing Entries		Post Closing Trial
Accounts	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$         2,200				$         2,200
Accounts Receivable	$         8,400				$         8,400
Prepaid Insurance	$         1,100				$         1,100
Cleaning Supplies	$             250				$             250
Truck	$         6,000				$         6,000
Accumulated Depreciation		$             300				$             300
Accounts Payable		$         2,200				$         2,200
Salaries Payable		$             550				$             550
Common Stock		$       10,000				$       10,000
Dividend	$             700			$             700	$                -
Retained Earning			$         4,900	$         9,800		$         4,900
Service Revenue		$         9,800	$         9,800			$                -
Cleaning Supplies Expense	$             950			$             950	$                -
Salaries Expense	$         2,350			$         2,350	$                -
Depreciation Expense	$             300			$             300	$                -
Gasoline Expense	$             500			$             500	$                -
Insurance Expense	$             100			$             100	$                -
Total	$       22,850	$       22,850	$       14,700	$       14,700	$       17,950	$       17,950
Income Statement:
Service Revenue		$         9,800
Less Expenses:
Cleaning Supplies Expense	$             950
Salaries Expense	$         2,350
Depreciation Expense	$             300
Gasoline Expense	$             500
Insurance Expense	$             100
Total Expense		$         4,200
Net Income		$         5,600
Statement of Retained Earning:
Net Income	$         5,600
Less: Dividend	$             700
Balance	$         4,900
Balance Sheet:
Assets
Current Assets:
Cash	$         2,200
Accounts Receivable	$         8,400
Prepaid Insurance	$         1,100
Cleaning Supplies	$             250
Total Current Assets		$       11,950
Fixed Assets:
Truck	$         6,000
Accumulated Depreciation	$           -300
Total Fixed Assets		$         5,700
Total Assets		$       17,650
Liabilities
Current Liabilities:
Accounts Payable	$         2,200
Salaries Payable	$             550
Total Liabilities		$         2,750
Equity:
Common Stock	$       10,000
Retained Earning	$         4,900
Total Equity		$       14,900
Total Liabilities and Equity		$       17,650