Question

The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances:

Accounts	Debits				Credits
Cash	$	13,000
Accounts Receivable		6,600
Supplies		2,600
Equipment		17,000
Accumulated Depreciation					$	5,800
Salaries Payable						8,300
Common Stock						18,000
Retained Earnings						7,100
Totals	$	39,200			$	39,200

The following is a summary of the transactions for the year:

1.		March		12		Provide services to customers, $46,000, of which $19,600 is on account.
2.		May		2		Collect on accounts receivable, $16,600.
3.		June		30		Issue shares of common stock in exchange for $4,000 cash.
4.		August		1		Pay salaries of $8,300 from 2020 (prior year).
5.		September		25		Pay repairs and maintenance expenses, $11,600.
6.		October		19		Purchase equipment for $6,600 cash.
7.		December		30		Pay $1,200 cash dividends to stockholders.

The following information is available for the adjusting entries.

Accrued salaries at year-end amounted to $17,500. Depreciation for the year on the equipment is $3,600. Office supplies remaining on hand at the end of the year equal $1,100.

1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 7). Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. The general Journal consist of 13 entires

Answer 1

1	Journal entries:
	Sl no.	Date	Account titles and explanation				Debit	Credit
	1	Mar 12.	Cash				26400
			Accounts receivable				19600
			Service revenue					46000
			(Provide services to customers)
	2	May 2.	Cash				16600
			Accounts receivable					16600
			(Collect on accounts receivable)
	3	June 30.	Cash				4000
			Common stock					4000
			(Issue shares of common stock)
	4	Aug 1.	Salaries payable				8300
			Cash					8300
			(Pay salaries from 2020)
	5	Sep 25.	Repairs and maintenance expenses				11600
			Cash					11600
			(Pay repairs and maintenance expenses)
	6	Oct 19.	Equipment				6600
			Cash					6600
			(Purchase equipment)
	7	Dec 30.	Dividends				1200
			Cash					1200
			(Pay cash dividends to stockholders)
	General ledger:
		Cash					Accounts receivable
	Date	Debit	Date	Credit		Date	Debit	Date	Credit
	Jan 1.	13000	Aug 1.	8300		Jan 1.	6600	May 2.	16600
	Mar 12.	26400	Sep 25.	11600		Mar 12.	19600
	May 2.	16600	Oct 19.	6600			26200		16600
	June 30.	4000	Dec 30.	1200		Bal.	9600
		60000		27700
	Bal.	32300
		Supplies					Equipment
	Date	Debit	Date	Credit		Date	Debit	Date	Credit
	Jan 1.	2600				Jan 1.	17000
						Oct 19.	6600
							23600		0
						Bal.	23600
		Accumulated depreciation			Salaries payable
	Date	Debit	Date	Credit		Date	Debit	Date	Credit
			Jan 1.	5800		Aug 1.	8300	Jan 1.	8300
							8300		8300
		Common stock				Retained earnings
	Date	Debit	Date	Credit		Date	Debit	Date	Credit
			Jan 1.	18000				Jan 1.	7100
			June 30.	4000
		0		22000
			Bal.	22000