Question

M Ratajczyk opened the Big D Emporium on March 1, 2017. During March, the following transactions were completed:

March 1          Issued 10,000 shares of common stock for $25,000 cash.

1          Purchased used servers for $10,000, paying $6,000 cash and the balance on account.

3          Purchased office supplies for $1,500 on account.

5          Paid $2,400 cash on 1-year insurance policy effective March 1.

14        Billed customers $4,200 for data analysis services.

18        Paid $1,500 cash on amount owed on servers and $500 on amount owed on office supplies.

20        Paid $2,750 cash for employee salaries.

21        Collected $1,400 cash from customers billed on March 14.

28        Billed customers $6,200 for data analysis services.

31        Paid $350 for server maintenance which did not extend the life or function of the servers.

31        Declared and paid $900 cash dividend. ACCT 3201

Required:

Post to the ledger accounts.

Prepare a trial balance at March 31.

Journalize the following adjustments:

Earned but unbilled and uncollected revenue at March 31 was $800.

Depreciation on equipment for the month was $650.

One-twelfth of the insurance policy expired.

An inventory count shows $280 of office supplies on hand at March 31.

Incurred employee salaries but unpaid were $1,060.

Post adjusting entries to the general ledger.

Prepare an adjusted trial balance.

Prepare the income statement and a retained earnings statement for March and a classified balance sheet at March 31.

Journalize and post closing entries and complete the closing process.

Prepare a post-closing trial balance at March 31.

Answer 1

Cash

Common Stock

Balance

Balance

Date

Particulars

Debit

Credit

Debit

Credit

Date

Particulars

Debit

Credit

Debit

Credit

Mar.1

Common Stock

25000

25000

Mar.1

Cash

25000

25000

Mar.1

Equipment

6000

19000

25000

Mar.5

Prepaid insurance

2400

16600

25000

Mar.18

Accounts Payable

2000

14600

25000

Mar.20

Salaries Expense

2750

11850

25000

Mar.21

Accounts Receivable

1400

13250

Mar.31

Maintenance expenses

350

12900

Mar.31

Dividend

900

12000

Equipment

Accounts Payable

Balance

Balance

Date

Particulars

Debit

Credit

Debit

Credit

Date

Particulars

Debit

Credit

Debit

Credit

Mar.1

Cash

6000

6000

Mar.1

Equipment

10000

10000

Accounts payable

10000

16000

Mar.3

Office Supplies

1500

11500

16000

Mar.18

Cash

2000

9500

16000

9500

Office Supplies

Prepaid Insurance

Balance

Balance

Date

Particulars

Debit

Credit

Debit

Credit

Date

Particulars

Debit

Credit

Debit

Credit

Mar.3

Accounts Payable

1500

1500

mar.5

Cash

2400

2400

1500

2400

1500

2400

1500

2400

Service Revenue

Accounts Receivable

Balance

Balance

Date

Particulars

Debit

Credit

Debit

Credit

Date

Particulars

Debit

Credit

Debit

Credit

Mar.14

Accounts Receivable

4200

4200

Mar.14

Service Revenue

4200

4200

Mar.28

Accounts Receivable

6200

10400

Mar.21

Cash

1400

2800

10400

Mar.28

Service Revenue

6200

9000

10400

9000

Salaries Expense

Maintenance expenses

Balance

Balance

Date

Particulars

Debit

Credit

Debit

Credit

Date

Particulars

Debit

Credit

Debit

Credit

Mar.20

Cash

2750

2750

Mar.31

Cash

350

350

2750

350

2750

350

2750

350

Dividend

Balance

Date

Particulars

Debit

Credit

Debit

Credit

Mar.31

Cash

900

900

900

900

900

Big D Emporium
Trial balance as at Marc 31, 2017
	Unadjusted
	Debit	credit
Cash	12000
Accounts receivable	9000
Office Supplies	1500
Prepaid Insurance	2400
Equipment	16000
Accounts Payable		9500
Common stock		25000
Dividend	900
Service revenue		10400
Salary expense	2750
Miscellaneous expense	350
	44900	44900

	Big D Emporium
	Adjusting entries as at March 31, 2017
Date	Account Title	Debit	Credit
Dec.31	Accounts Receivable	800
	Service Revenue		800
Dec.31	Depreciation expense	650
	Acumulated Depreciation		650
Dec.31	Insurance Expense	200
	Prepaid Insurance		200
Dec.31	Salary expense	1060
	Salary payable		1060
Dec.31	Supplies expense	1220
	Office supplies		1220

Big D Emporium
Trial balance as at Marc 31, 2017
	Unadjusted		Adjustments		Adjusted
	Debit	credit	Debit	credit	Debit	credit
Cash	12000				12000
Accounts receivable	9000		800		9800
Office Supplies	1500			1220	280
Prepaid Insurance	2400			200	2200
Equipment	16000				16000
Acumulated Depreciation				650		650
Accounts Payable		9500				9500
Salary Payable				1060		1060
Common stock		25000				25000
Dividend	900				900
Service revenue		10400		800		11200
Salary expense	2750		1060		3810
Miscellaneous expense	350				350
Depreciation expense			650		650
Insurance Expense			200		200
Supplies Expense			1220		1220
Total	44900	44900	3930	3930	47410	47410

Big D Emporium
Income statement
for the month ending March 31, 2017
Service Revenue		11200
Expenses:
Salary expense	3810
Supplies expense	1220
Miscellaneous expense	350
Depreciation expense	650
Insurance Expense	200
Total expenses		6230
Net income		4970
Big D Emporium
Statement of retained earnings
for the month ending March 31, 2017
Beginning balance		0
Add: Net income for the month		4970
		4970
Less: Dividend paid		900
Ending balance		4070
Big D Emporium
Balance Sheet
as at March 31, 2017
Assets
Cash		12000
Accounts receivable		9800
Office Supplies		280
Prepaid Insurance		2200
Equipment	16000
Acumulated Depreciation	650	15350
Total Assets		39630
Liabilities and equity
Accounts Payable		9500
Salary Payable		1060
Common stock		25000
Retained earnings		4070
Total liabilities and equity		39630

CARL REDMON CONSULTING
Closing entries for the month ending March 31, 2017
Account Title	Debit	Credit
Service Revenue	11200
Salary expense		3810
Supplies expense		1220
Miscellaneous expense		350
Depreciation expense		650
Insurance Expense		200
Income summary		4970
(Closing the incomes and expenses to income summary)
Income summary	4970
Retained earnings		4970
(Closing income summary to retained earnings)
Dividends	900
Retained earnings		900
(Closing of dividend to retained earnings)

Big D Emporium
Trial balance as at Marc 31, 2017
	Post Closing
	Debit	credit
Cash	12000
Accounts receivable	9800
Office Supplies	280
Prepaid Insurance	2200
Equipment	16000
Acumulated Depreciation		650
Accounts Payable		9500
Salary Payable		1060
Common stock		25000
Retained Earnings		4070
Dividend
Service revenue
Salary expense
Miscellaneous expense
Depreciation expense
Insurance Expense
Supplies Expense
Total	40280	40280