Question

Laura Eddy opened Eddy's Carpet Cleaners on March 1, 2021. In March, the following transactions were completed: Complete all steps in accounting cycle. Mar. 1 Laura invested $10,000 cash in the business. 1 Purchased a used truck for $6,500, paying $1,500 cash and signing a note payable for the balance. 3 Purchased supplies for $1,200 on account. 5 Paid $1,200 on a one-year insurance policy, effective March 1. 12 Billed customers $4,800 for cleaning services. 18 Paid $500 of amount owed on supplies. 20 Paid $1,800 for employee salaries. 21 Collected $1,400 from customers billed on March 12. 25 Billed customers $2,500 for cleaning services. 31 Paid $375 for repairs on the truck. 31 Withdrew $900 cash for personal use. Instructions

a. Journalize and post the March transactions.

b. Prepare a trial balance at March 31.

c. Journalize and post the following adjustments: The truck has an estimated useful life of five years. One twelfth of the insurance expired. An inventory count shows $400 of supplies on hand at March 31. Accrued but unpaid employee salaries were $500. The note payable has a 4.5% annual interest rate. Unbilled cleaning services at March 31 were $500.

d. Prepare an adjusted trial balance.

e. Prepare the income statement and statement of owner's equity for March, and a classified balance sheet at March 31, 2021. Of the note payable, $2,000 must be paid by March 1, 2022. f. Journalize and post the closing entries. g. Prepare a post-closing trial balance at March 31.

Answer 1