Question

ACCOUNTING CLOSING PROCESS

Harry Harper LLC opened for business on July 1, 2017. During July the following transactions were completed.

July 1:                    Harry invested $18,000 cash in the business.

July 1:                    Purchased used truck for $9,000, paying $2,000 cash and the balance on account.

July 3:                    Purchased cleaning supplies for $1,800 on account.

July 5:                    Paid $4,800 cash on two-year insurance policy effective July 1.

July 12:                 Billed customers $1,500 for cleaning services.

July 18:                 Paid $2,000 cash on amount owed on truck and $800 on amount owed on cleaning supplies.

July 20:                 Paid $1,700 cash for employee salaries.

July 21:                 Collected $400 cash from customers billed on July 12.

July 25:                 Billed customers $9,000 for cleaning services.

July 31:                 Paid gas and oil for month on truck $400.

July 31:                 Withdrew $500 cash for personal use.

The following adjusting entries are required for July 31:

Services provided but unbilled and uncollected at July 31 were $1,000.

Harry invested additional $1,500

Depreciation on equipment for the month was $350.

One month of the insurance expired.

An inventory count shows $400 of cleaning supplies on hand at July 31.

Accrued but unpaid employee salaries were $700.

Instructions

1. Complete the worksheet for the follow column headers:

Trial balance

Adjustments   

Adjusted trial balance   

Income statement

Balance sheet

Post-closing trial balance   

Answer 1

	Unadjusted Trial Balance		Adjustments		Adjusted Trial Balaance		Income Summary		Post closing Trial
									Balance
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	6200		1500		7700				7700
Cleaning supplies	1800			1400	400				400
Accounts receivable	10100		1000		11100				11100
Prepaid insurance	4800			200	4600				4600
Truck	9000				9000				9000
Accumulated deprecition-Truck				350		350				350
Accounts payable		6000				6000				6000
Salaries payable				700		700				700
Service revenue		10500		1000		11500		11500
Harry, Capital		18000		1500		19500				25750
Harry, Drawings	500				500
Salaries expense	1700		700		2400		2400
Maintenance expenses	400				400		400
Depreciation expense			350		350		350
Insurance expense			200		200		200
Supplies expense			1400		1400		1400
	34500	34500	5150	5150	38050	38050	4750	11500	32800	32800
Net income							6750
INCOME STATEMENT							11500	11500
Service revenue		11500
Expenses:
Salaries expense	2400
Maintenance expenses	400
Depreciation expense	350
Insurance expense	200
Supplies expense	1400	4750
Net income		6750
BALANCE SHEET
ASSETS:
Current Assets:
Cash	7700
Cleaning supplies	400
Accounts receivable	11100
Prepaid insurance	4600	23800
Truck	9000
Accumulated deprecition-Truck	350	8650
Total Assets		32450
TOTAL LIABILITIES & OWNERS' EQUITY:
Current liabilities:
Accounts payable	6000
Salaries payable	700	6700
Owners' Equity:
Harry, Capital		25750
Total liabilities & owners' equity		32450
POST CLOSING TRIAL BALANCE
Cash	7700
Cleaning supplies	400
Accounts receivable	11100
Prepaid insurance	4600
Truck	9000
Accumulated deprecition-Truck		350
Accounts payable		6000
Salaries payable		700
Harry, Capital		25750
	32800	32800