Question

Emily Lee grew up in Vancouver and loves to be a tourist in her own city. In order to make money to pay for university, she opened a walking tour company, Very Vancouver. The following are transactions for the month of May 2017, the first month of operations.

May 2 Emily moved $9,550 from her personal bank account to a business bank account at TD Bank. She also invested a laptop worth $1,332 into the business.
May 3 Purchased supplies, including a microphone, and brochures for $855 cash.
May 4 Purchased a printer for $324 on account.
May 5 Purchased a one-year insurance policy for $2,160 cash.
May 6 Emily withdrew $214 for a Mother’s Day gift.
May 8 Interviewed and hired one employee to assist with leading tours.
May 10 Emily launched a social media campaign of Very Vancouver on Facebook. As a result, she received $2,125 of cash for future tour bookings.
May 15 Led three tours of Stanley Park and received $1,020 cash.
May 25 Led four tours of Granville Island, for $1,170. The customers on this tour had prepaid on May 10.

The following information is known at May 31, 2017.
• The laptop has an estimated life of three years.
• The printer has an estimated life of three years.
• There are $285 of supplies that are not used.
• A portion of the insurance policy has expired.
• Wages of $625 were unpaid and unrecorded.

Required
1-a. Prepare journal entries for the May transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1-b. Prepare the adjusting entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1-c. Prepare the closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Post the above journal entries to the T-accounts.

3. Prepare a post-closing trial balance.

4. Prepare an income statement and statement of changes in equity for the year ended May 31, 2017.
5. Prepare a classified balance sheet at May 31, 2017. (Be sure to list the assets and liabilities in order of their liquidity.)

Answer 1

Date	Account Title	Debit	Credit
2-May	Cash	$ 9,550.00
	Emily's Capital		$ 9,550.00
2-May	Office Equipment	$ 1,332.00
	Emily's Capital		$ 1,332.00
3-May	Supplies	$     855.00
	Cash		$     855.00
4-May	Office Equipment	$     324.00
	Cash		$     324.00
5-May	Insurance expense	$ 2,160.00
	Cash		$ 2,160.00
6-May	Emily's Drawings	$     214.00
	Cash		$     214.00
8-May	No entry
10-May	Cash	$ 2,125.00
	Unearned Tour revenue		$ 2,125.00
15-May	Cash	$ 1,020.00
	Tour Revenue		$ 1,020.00
25-May	Unearned Tour revenue	$ 1,170.00
	Tour Revenue		$ 1,170.00
	ADJUSTMENT ENTRIES
31-May	Depreciation-Office Equipment	$       46.00
	Acc.depn.-Office equipment		$       46.00
	(1332+324))/3*1/12(St.line depn.)
31-May	Supplies expense	$     570.00
	Supplies		$     570.00
31-May	Unexpired Insurance	180
	Insurance expense		$     180.00
31-May	Wages	$     625.00
	Wages Payable		$     625.00

Trial Balance of Very Vancouver as on May 31	Debit	Credit	Income Statement		Balance Sheet
Cash	$10,312.00				$10,312.00
Supplies	$     285.00				$     285.00
Unexpired Insurance	$     180.00				$     180.00
Office Equipment	$ 1,656.00				$ 1,656.00
Acc.depn.-Office equipment		$       46.00				$       46.00
Wages Payable		$     625.00				$     625.00
Unearned Tour revenue		$ 2,125.00				$ 2,125.00
Emily's Capital		$10,882.00				$10,882.00
Emily's Drawings	$     214.00				$     214.00
Supplies expense	$     570.00		$   570.00
Insurance expense	$ 1,980.00		$1,980.00
Depreciation-Office Equipment	$       46.00		$     46.00
Wages	$     625.00		$   625.00
Tour Revenue		$ 2,190.00		$ 2,190.00
Expense over Income(loss)				$ 1,031.00	$ 1,031.00
Total	$15,868.00	$15,868.00	$3,221.00	$ 3,221.00	$13,678.00	$13,678.00