In: Accounting
a. On August 1, 2020, the following were the account balances of Sheffield Repair Services.
Debit | Credit | ||||||
Cash | $6,400 | Accumulated Depreciation—Equipment | 640 | ||||
Accounts Receivable | 3,080 | Accounts Payable | 2,440 | ||||
Notes Receivable | 4,200 | Unearned Service Revenue | 1,340 | ||||
Supplies | 1,090 | Salaries and Wages Payable | 1,510 | ||||
Equipment | 10,600 | Owner's Capital | 19,440 | ||||
25,370 |
25,370 |
During August, the following summary transactions were
completed.
Aug. 1 | Paid $420 cash for advertising in local newspapers. Advertising flyers will be included with newspapers delivered during August and September. | ||
3 | Paid August rent $400. | ||
5 | Received $1,270 cash from customers in payment of account. | ||
10 | Paid $3,310 for salaries due employees, of which $1,800 is for August and $1,510 is for July salaries payable. | ||
12 | Received $2,970 cash for services performed in August. | ||
15 | Purchased store equipment on account $2,120. | ||
20 | Paid creditors $2,120 of accounts payable due. | ||
22 | Purchased supplies on account $850. | ||
25 | Paid $3,070 cash for employees’ salaries. | ||
27 | Billed customers $3,990 for services performed. | ||
29 | Received $830 from customers for services to be performed in the future. |
Enter the August 1 balances in the ledger accounts.
Journalize the August transactions. (Credit account
titles are automatically indented when the amount is entered. Do
not indent manually. Record journal entries in the order presented
in the problem.)
Post to the ledger accounts.
Prepare a trial balance at August 31.
b. Adjustment data:
1. | A count shows supplies on hand of $1,020. | ||
2. | Accrued but unpaid employees’ salaries are $1,630. | ||
3. | Depreciation on equipment for the month is $340. | ||
4. | Services were performed to satisfy $850 of unearned service revenue. | ||
5. | One month’s worth of advertising services has been received. | ||
6. | One month of interest revenue related to the $4,200 note receivable has accrued. The 4-month note has a 6% annual interest rate. |
Journalize and post adjusting entries. (Credit account
titles are automatically indented when the amount is entered. Do
not indent manually.)
\Prepare an adjusted trial balance.
Prepare an income statement for August.
Prepare an owner’s equity statement for August.
Prepare a classified balance sheet at August 31. (List Current Assets in order of liquidity.)
Journalize the closing entries. (Credit account
titles are automatically indented when the amount is entered. Do
not indent manually.)
Post closing entries and complete the closing process. (For accounts that have zero ending balance, the entry should be the balance date and zero for the amount. Post entries in the order of journal entries presented.)
Prepare a post-closing trial balance at August 31.
Journal & Ledger have been prepared below. Each entry has been numbered and accordingly its posting to the ledger is also numbered for tracking the effect of each entry.
JOURNAL - For transactions of August
LEDGER - Opening balances are posted for each balance given in question and entries are posted from Journal above. User may track each entry from journal entry reference number above.
Debit | Amount | Credit | Amount | ||
Cash | |||||
Opening balance | 6,400.0 | ||||
(3) | To Accounts receivable | 1,270.0 | (1) | By prepaid expense | 480.0 |
(5) | To Revenue | 2,970.0 | (2) | By Rent | 400.0 |
(11) | To Unearned revenue | 830.0 | (4) | By Salaries & Wages | 1,800.0 |
(4) | By Salaries & Wages payable | 1,510.0 | |||
(7) | By Accounts payable | 2,120.0 | |||
(9) | By Salaries & Wages | 3,070.0 | |||
Closing balance | 2,090.0 | ||||
11,470.0 | 11,470.0 | ||||
Accounts receivable | |||||
Opening balance | 3,080.0 | (3) | BY Cash | 1,270.0 | |
(10) | By revenue | 3,990.0 | |||
Closing balance | 5,800.0 | ||||
7,070.0 | 7,070.0 | ||||
Notes receivable | |||||
Opening balance | 4,200.0 | Closing balance | 4,200.0 | ||
4,200.0 | 4,200.0 | ||||
Supplies | |||||
Opening balance | 1,090.0 | ||||
(8) | To Accounts payable | 850.0 | Closing balance | 1,940.0 | |
1,940.0 | 1,940.0 | ||||
Equipment | |||||
Opening balance | 10,600.0 | Closing balance | 12,720.0 | ||
(6) | To Accounts payable | 2,120.0 | |||
12,720.0 | 12,720.0 | ||||
Acc Depreciation | |||||
Closing balance | 640.0 | Opening balance | 640.0 | ||
640.0 | 640.0 | ||||
Accounts payable | |||||
(7) | To Cash | 2,120.0 | Opening balance | 2,440.0 | |
Closing balance | 3,290.0 | (6) | By Equipment | 2,120.0 | |
(8) | By Supplies | 850.0 | |||
5,410.0 | 5,410.0 | ||||
Unearned service revenue | |||||
Closing balance | 2,170.0 | Opening balance | 1,340.0 | ||
(11) | By Cash | 830.0 | |||
2,170.0 | 2,170.0 | ||||
Salaries & wages payable | |||||
(4) | To Cash | 1,510.0 | Opening balance | 1,510.0 | |
Closing balance | - | ||||
1,510.0 | 1,510.0 | ||||
Owner's capital | |||||
Closing balance | 19,440.0 | Opening balance | 19,440.0 | ||
19,440.0 | 19,440.0 | ||||
Salaries & Wages | |||||
Opening balance | - | Closing balance | 4,870.0 | ||
(4) | To Cash | 1,800.0 | |||
(9) | To Cash | 3,070.0 | |||
4,870.0 | 4,870.0 | ||||
Rent | |||||
Opening balance | - | Closing balance | 400.0 | ||
(2) | To Cash | 400.0 | |||
400.0 | 400.0 | ||||
Revenue | |||||
Closing balance | 6,960.0 | Opening balance | |||
(5) | By Cash | 2,970.0 | |||
(10) | By Accounts receivable | 3,990.0 | |||
- | 6,960.0 | ||||
Advertisement expense | |||||
Opening balance | - | Closing balance | - | ||
- | - | ||||
Prepaid Expense | |||||
Opening balance | - | Closing balance | 480.0 | ||
(1) | To Cash | 480.0 | |||
480.0 | 480.0 | ||||
Given below is the trial balances prepared from opening balances and balances arrived post adjustments. Balance on Aug 31 has been taken from the closing balances appearing in the ledger above.
Below is the journal and ledger postings of adjustment entries.
Journal-
Ledger - The adjustment entries have been highlighted in RED
I have answered four parts of the question. Kindly repost the question along with the provided solutionm for me or another expert to solve rest of the parts in the given time.
Providing below readily available adjusted trial balance on Aug 31