Question

Thunderduck Car Repair is a company that provides car repair services and is in its second year of operations. The company uses accrual basis accounting and follows GAAP. Financial statements must be provided monthly to the company’s lender, White Rock Bank, on a monthly basis.

Assignment

• Record January transactions in the General Journal and post to the General Ledger.
• Record adjusting entries for January in the General Journal and post to the General Ledger.
• Prepare the adjusted trial balance as of January 31.

	Thunderduck Car Repair
	Post-Closing Trial Balance
	December 31, 2XX1
	Debit	Credit
Cash	5,200
Accounts receivable	2,800
Supplies	850
Prepaid rent	900
Building	76,000
Equipment	118,000
Accumlated depreciation		38,540
Accounts payable		6,410
Utilities payable		795
Salaries and wages payable		2,450
income tax payable		7,140
Notes payable		30,800
Common stock		91,200
Retained Earnings		26,415
Total	203,750	203,750

January Transactions
1-Jan	Performed car repair services and received cash at the time of sale, $5,210.
2-Jan	Paid for the car parts purchased on account last year, $945.
4-Jan	Paid wages and salaries for $3,300, part of which was accrued in December.
10-Jan	Paid the utility bill that was already accrued in December in utilities payable.
16-Jan	Collected cash from credit sales made last year, $2,610.
20-Jan	Purchased $5,500 of equipment, paid $2,750 cash and issued a note for $2,750.
22-Jan	Performed car repair services on account, $3,600.
27-Jan	Paid dividends to the company's owners, $580.
January Adjusting Entries
31-Jan	The estimated depreciation on building and equipment is $810.
31-Jan	One month of rent has expired, $900.
31-Jan	The annual interest rate is 5% on all notes and paid quarterly. It was last paid on Dec 31 of the prior year. Round to the nearest dollar.
31-Jan	The supplies remaining at the end of the month was $550.
31-Jan	Accrued wages and salaries worked in January that will be paid 2-4, $1,600.
31-Jan	The estimated income taxes for the month is $650.

Answer 1